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​​DC Plan Participants Are Not Feeling as Prepared for Retirement as Plan Sponsors (and Advisors) Think​

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American workers are suffering from a decline in confidence that they will be sufficiently prepared for retirement — and they’re looking to their employers for help.

This year, Voya Investment Management’s biennial Survey of the Retirement Landscape online survey included defined contribution plan participants for the first time to better understand their perspectives on issues such as retirement readiness, investing, and financial confidence. 

We discovered a gap between participant feelings versus plan sponsor and plan advisor perceptions when it comes to retirement readiness. Only 69% of participants said they feel very or somewhat prepared for retirement, while 91% of sponsors and 70% of advisors believe that participants fall into those two categories.

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Participants are worried about generating income in retirement

Retirement income planning is a major concern for participants, as many expressed doubts about their ability to save for retirement due to inflation, the economy and not being able to save enough.

Nearly 90% of participants said they are somewhat or very interested in retirement income solutions and an investment option that helps provide income in retirement so they can maintain their current standard of living.

A retirement income solution can potentially improve participant retirement readiness

A multi-pronged plan design solution that combines recordkeeping, investments, technology, communications, and risk management may help participants feel more retirement ready.

Plan sponsors may want to consider some or all of the following features that can support participants as they transition from the accumulation to the decumulation phase of retirement. 

  • Systematic withdrawals to allow retirees to create an automated income stream.
  • An expanded investment menu for workers nearing retirement that includes additional fixed income options, lower volatility equity options and other strategies, such as managed accounts, in-plan annuities, and managed payout funds.
  • Intelligent withdrawal solutions that integrate a diversified multi-asset fund that balances growth and stability with a technology interface that helps retirees create automated income streams based on their needs and preferences.
  • A qualified default investment alternative (QDIA) into which plan sponsors can default participants over age 50.
  • Rollovers into the plan to allow retirees to consolidate their assets, simplify account management and make it easier to calculate withdrawals and required minimum distributions.
  • Partial distributions to allow retirees more income flexibility.
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Past performance does not guarantee future results. This market insight has been prepared by Voya Investment Management for informational purposes. Nothing contained herein should be construed as (i) an offer to sell or solicitation of an offer to buy any security or (ii) a recommendation as to the advisability of investing in, purchasing or selling any security. Any opinions expressed herein reflect our judgment and are subject to change. Certain of the statements contained herein are statements of future expectations and other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (1) general economic conditions, (2) performance of financial markets, (3) interest rate levels, (4) increasing levels of loan defaults, (5) changes in laws and regulations and (6) changes in the policies of governments and/ or regulatory authorities. The opinions, views and information expressed in this commentary regarding holdings are subject to change without notice. The information provided regarding holdings is not a recommendation to buy or sell any security. Fund holdings are fluid and are subject to daily change based on market conditions and other factors. 

All investing involves risks of fluctuating prices and the uncertainties of rates of return and yield inherent in investing. All security transactions involve substantial risk of loss. A target date is the approximate date when investors plan to start withdrawing their money; principal value fluctuates and there is no guarantee of value at any time, including the target date. 

This information is provided by Voya for your education only. Plan sponsors must consider the appropriateness of the investments and plan services offered to its participants. Neither Voya nor its representatives offer tax or legal advice. Please consult your tax or legal advisor before making a tax-related investment/insurance decision. 

Plan sponsor and DC specialist surveys 

Brookmark Research assisted Voya IM with the development, execution, and analysis of the plan sponsor and DC specialist surveys. The surveys were conducted online, as in prior years. Plan sponsor and DC specialist surveys were very similar with only minor differences in the language used. Interviews took approximately 17 minutes to complete, and were collected from mid-January to mid-February 2025. 

Participant survey 

Voya Consumer Insights & Research assisted Voya IM with the development, execution, and analysis of the retirement plan participant survey. Data are based on the results of a Voya Financial Consumer Insights & Research survey conducted on January 23 and 24, 2025, among n=500 Americans age 18+ who were full-time employees and actively contributing to their employer-sponsored retirement plan (balanced by age and gender to reflect the U.S. population). 

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