A recent Fidelity report reveals that over 80% of plan sponsors prefer to allow employees to keep their assets in-plan and withdraw them over time. The number of workers aged 55 and older has increased by 74% over the past two decades, prompting plan sponsors to focus more on how participants transition from saving for retirement to living in it.

Despite the importance of retirement planning, a staggering 67% of investors admit to spending no time at all working on it in a typical month, according to a recent survey conducted by the Nationwide Retirement Institute. That’s a vast majority of investors failing to take even small steps toward securing their financial future. For plan sponsors, this presents both a challenge and an opportunity.

Generation X — comprising those born between 1965 and 1980 — faces unique financial and social pressures that have left almost half of them with no retirement savings. Compounding these challenges, only 1 in 10 Gen Xers plans to delay filing for Social Security until age 70 to maximize their benefit, due in part to concerns about the program’s long-term solvency. For plan sponsors, providing tools and resources tailored to this generation’s needs can play a crucial role in helping them take meaningful and measurable steps toward retirement readiness.

When considering short-term funding options, participants are often advised to avoid tapping into their 401(k) accounts through loans or hardship withdrawals, as early withdrawals can impede long-term retirement savings. However, the SECURE 2.0 Act of 2022 has introduced more penalty-free emergency withdrawal provisions, offering increased liquidity and flexibility within 401(k) plans. While some see this as a risk to retirement balances, a recent Vanguard study found that participant contribution rates tend to remain stable before and after taking loans or hardship withdrawals.

Americans believe they need nearly $1.5 million to retire comfortably, a number that has soared by more than 50% since 2020, according to Northwestern Mutual’s 2024 Planning & Progress Study. Yet the Employee Benefit Research Institute reports that only about half of workers have actually calculated their retirement needs. Employees can easily latch onto media-hyped, generalized one-size-fits-all numbers without a clear understanding of whether those figures align with their personal financial circumstances. The conversation around prudent retirement planning should begin with defining what it isn’t …

Reexamining your finances at the start of the year may not seem as exciting as making a commitment to healthier habits or fitness objectives, but financial wellness is closely related to both mental and physical health. You might be surprised at how simple it is to take charge of your finances. The following actions will assist you in reaching financial success in 2025 and beyond: