Confidence Doesn’t Stop Employees from Making Reactive Investment Decisions
Employees are optimistic over their retirement savings, even if some are making reactive decisions to their investments over market fluctuations.
The fifth annual Protected Retirement Survey from Nationwide Retirement Institute found that economic instability has prompted some to move their investments. Forty-eight percent of workers surveyed have transferred their investments to more conservative funds as a result of volatility. This was especially true for younger workers, with 54% of those ages 22 to 34 having shifted their savings.
This is despite the fact that savers are generally confident in their retirement savings, reports Nationwide. Seventy-nine percent of workers hold a positive outlook on their savings—a 14% increase compared to 2024—and the number of employees on track with their retirement preparedness has also increased from 65% in 2024 to 71% in 2025.
Nationwide’s research notes how respondents who display higher levels of confidence are likelier to take on conservative approaches to investments and savings. These respondents are 12 points more likely to have reallocated savings to conservative assets and 10 points likelier to have made emotional decisions about retirement investments—which they end up regretting, Nationwide states.
Thus, the findings suggest that confidence cannot be correlated with proper preparation, experts say. The research takes note of a past study from The American College of Financial Services, which found that Americans scored 31% on a financial literacy quiz despite articulating high levels of financial confidence.
“These findings show that feeling confident isn’t the same as being prepared. Even confident investors make decisions that undermine their long-term financial security,” said Cathy Marasco, vice president of Protected Retirement at Nationwide.
Much of this reactivity stems from the belief that investors don’t feel protected with their savings. Most workers surveyed expressed wanting plan features that provide predictability and protection, but don’t have access to those tools from their employer. According to the findings, nearly nine in 10 employees want guaranteed monthly income that lasts throughout their retirement, but less than two in five private sector employers offer protected income benefits.
“Even financially knowledgeable investors often make emotional decisions during market volatility,” said Eric Ludwig, PhD, CFP, director of the Center for Retirement Income at The American College of Financial Services. “The solution isn’t just more education, but plan designs that account for human psychology. Features like lifetime income options can help workers avoid the temptation to make reactive decisions in the first place, regardless of their knowledge level.”
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with nearly a decade of experience and a passion for telling stories and reporting news. She is originally from Queens, New York, but now resides in Denver, Colorado.
