Inflation, Saving for Retirement Among Top Financial Fears
Inflation and saving for retirement are among the top financial concerns for respondents in a recent U.S. study.
The MFS 2025 Global Retirement Study, which focused on U.S. participants and retirees, found that daily inflation and retirement savings are two of the leading worries across all generations. A majority of respondents (76%) believe they need to save more now that originally planned to reach retirement goals, while 61% expect to work longer.
Both of these findings grew compared to last year, from 52% and 42%, respectively.
In response to April’s market volatility, one-third of respondents opted to invest in more conservative strategies, while 40% stayed the course at their current risk level. While participants largely toughed it out during the volatile market, MFS experts note the experience had large impacts to participants’ financial and retirement confidence.
“In comparison to last year, we saw confidence erode across all age groups, and we continue to see a trend that participants feel they need to save more and work longer, increasing since 2021,” said Jeri Savage, lead retirement strategist for MFS, in a statement. “Participants have a lot on their minds, and this is a timely reminder, despite strong U.S. equity markets, that an uncertain overall macroeconomic picture and other competing financial priorities impact sentiment and saving for retirement.”
Priorities by age group
MFS’ research analyzed the financial challenges for each generation and gave insights on how advisors should tailor strategies to each group.
For example, while Gen Z and Millennial groups struggled with the cost of housing, Baby Boomers were focused on affording healthcare coverage.
For Gen Zers, MFS recommends advisors focus on digital tools and broad financial wellness programs that address budgeting and saving priorities. Savings strategies like target-date funds (TDFs) could be a preferred investment opportunity for its simplicity, the research states.
For Millennials, advisors should emphasize saving for retirement while addressing other financial priorities. This group can benefit from core menu personalization along with TDF options.
Gen Xers need help understanding investment changes and competing priorities, as many struggle in caregiving costs while saving for retirement. Like Millennials, these groups could also benefit from core menu personalization and TDF options.
Boomers highly value in-person communications and want personalized retirement advice with flexible distribution options, adds MFS.
“Retirement is personal. Advisors and sponsors need to make sure that participants have the right tools, investment strategies and advice at the right life stage to ensure their nest eggs have the best chance to grow across market cycles and are well positioned for the eventual transition to income generation,” said Savage.
Retirement realities
As more participants intend to work longer, the survey reveals that many admit fearing retiring later than their expected goal date. Twenty-seven percent of respondents to the survey have little to no confidence in their ability to retire at their expected age, and only 45% expressed some level of confidence.
While many expect a gradual move to retirement, 70% of current retirees said they experienced a hard stop in their transition. Forty-nine percent retired when they expected, and 44% retired earlier than anticipated.
MFS survey included over 4,000 global respondents, including more than 2,800 workplace defined contribution (DC) retirement plan members and 1,200 retirees who are fully or partially retired.
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.
