Saving for retirement is a fragile and divided' topic

"According to BlackRock, optimism about retirement is rising among the current workforce as 64% of this year's respondents expressed confidence. But that data point is contradicted by the record-low 38% of employers that say at least 60% of their employees are on track for retirement. Over the past decade, long-term market growth and enhancements to the retirement system have boosted saver confidence, the report noted. In fact, savers today are more confident than their generational peers were 10 years ago."

"BlackRock highlighted some key policy shifts since the 1990s aimed at creating more retirement savings. These include the Pension Protection Act of 2006, which legitimized default investment options and nudged participants into saving behaviors that mimic the discipline of DB (defined benefit plans). Target-date funds (TDFS) have been widely adopted as default investment options since 2010, while the SECURE Act of 2019 included multiple provisions to encourage savings."

"Gen Z appears much more confident about their retirement prospects than millennials did nearly a decade ago. Three-quarters of Gen Z respondents expressed optimism in this year's survey, compared to 59% of millennials who were recent entries to the workforce in 2016. Confidence during prime earning years around age 35 is also up from 2016 as 70% of today's millennials say they're optimistic, compared to 43% of Gen X respondents at the same age in 2016."

Employees in the survey had at least $5,000 in current account assets; respondents included Gen X (36%), millennials (32%), baby boomers (16%) and Gen Z (16%). Retiree respondents had been out of the workforce for at least 10 years, with roughly half having access to a defined benefit or pension plan for retirement income. Worker optimism about retirement rose to 64% expressing confidence, while only 38% of employers say at least 60% of employees are on track. Long-term market growth and retirement system changes boosted saver confidence, but plan sponsor concerns and a persistent gender gap remain. Policy changes since the 1990s—Pension Protection Act of 2006, broad adoption of target-date funds since 2010, and the SECURE Act of 2019—have encouraged default saving behaviors. Gen Z shows substantially higher optimism than earlier cohorts, and millennials in prime earning years report higher confidence than comparable Gen X peers a decade earlier, while older-worker confidence remains around 54%.

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