Our new survey findings reveal critical insights about how TDFs help influence retirement readiness, reduce anxiety, and address participants’ deepest concerns about turning savings into income.
Introduction
We went straight to the source, surveying over 1,100 participants who were offered TDFs in their employer-sponsored retirement plans from late March through early April 2025 about their experiences alongside our biennial Survey of the Retirement Landscape.1
What we discovered offers valuable insights for plan sponsors and defined contribution (DC) specialists about how they can better support participants. These findings reveal critical insights about how TDFs help influence retirement readiness, reduce anxiety, and address participants’ deepest concerns about turning savings into income.
Key findings
- Simplicity drives TDF adoption: Of the participants we surveyed, 83% of employed participants and 86% of retirees said they currently invest in TDFs. The majority cited good performance, ease of selecting a fund, and built-in diversification as their top reasons for choosing to invest in TDFs.
- TDF adoption, in turn, drives retirement confidence: 71% of participants who invested in TDFs indicated having much higher confidence about their ability to reach their retirement goals, compared with 58% of those who didn’t invest in TDFs. TDF investors were also twice as likely to describe themselves as experienced or very experienced investors (56% vs. 24%).
- TDFs reduce retirement planning stress: 91% of TDF investors agreed that investing in a TDF alleviates stress, versus 73% of non-investors.
- Participants are hungry for innovation: They showed high interest in TDFs that offer features such as a multi-manager approach, enhanced diversification, and a blend of active and passive underlying investments.
- Knowledge gaps persist: While most participants said they understand TDF basics, misconceptions about guarantees and target date outcomes remained common.
- Barriers are rooted in understanding and control: Participants and retirees who didn’t invest in TDFs often cited lack of understanding, a preference for self-managing investments, and concerns about cost. Good performance, leaving investing to professionals, built-in diversification, and time savings are the most effective motivators for changing their minds.
For DC specialists and plan sponsors, these findings underscore a critical message: TDFs aren’t just investment vehicles; they’re confidence-building tools that can fundamentally shift how participants experience retirement planning.