What benefit managers should know about employees' approach to retirement

Recent economic trends including inflation, tariffs and stock market struggles are driving people to think obsessively about their retirement plans, considering changes to help them survive the current financial climate. 

"Retirement readiness is not just a personal issue, it's a societal one," Peter de Silva, CEO of IRALOGIX, recently told EBN's Alyssa Place. "When individuals are unprepared for retirement, the ripple effects are felt across families, workplaces, communities, and the broader economy." 

Data from Vanguard reveals how retirement plans are changing, with a focus on automatic enrollment adoption, automatic enrollment default rates, trends in elected deferral changes and pure target-date investors and exchanges. 

Read more: Benefits that boost retirement confidence 

Vanguard's data found that larger retirement plans with at least 1,000 participants are more likely to implement automatic enrollment, and 61% of plans with automatic enrollment defaulted their employees into the plan at a rate of 4% or higher, with this number increasing year-over-year. 

In 2024, 16% of participants increased their payroll deferral percentage, while 8% decreased it. Additionally, 29% of retirement plan participants increased their deferral percentage from an annual automatic escalation, leading to 45% of participants increasing their savings, which is the highest percentage that Vanguard has tracked in their 25 years of this report.

Read more about how retirement plans are changing.