2025 DC Retirement at a Glance

1. RETIREMENT MILLIONAIRES – Of the approximately 24 million participants in 401(k) plans at Fidelity, the average account balance at the end of Q3 2024 was $132,300, which was up 23% on a year/year basis and 26% over the past five years. The number of 401(k) millionaires in Q3 increased 9.5% to 544K from 497K in Q2. (Source: Fidelity)

2. NOT LIVING UP TO EXPECTATIONS – 26% of retired women say that retirement is not at all what they expected compared to just 19% who say retirement has lived up to their expectations. Of those who said that retirement has not been what they expected, 50% say it has been more expensive than they planned for and 63% wish they had started to save earlier. (Source: Corebridge Financial)

3. 3.7%: THE NEW 4% – The 4% rule suggests that a retiree can safely withdraw 4% of their total savings and investments at the first year of retirement and withdraw that same amount (on an inflation adjusted basis) every year thereafter. Citing higher equity valuations, which imply lower future returns and lower interest rates, Morningstar lowered its safe withdrawal rate to 3.7%. (Source: Morningstar)

4. MORE ANNUITY OPTIONS – 85% of retirement plan sponsors said employees need more guaranteed income than Social Security will provide, and 80% of employers that do not currently offer annuities in their retirement plans are actively considering adding one, with over half of those planning to offer one in the next two years. (Source: TIAA)

5. VARYING PARTICIPATION – 80% of all Americans have access to an employer retirement plan while 69% participate in an employer plan or IRA. Across income levels, participation varies widely. 97% of Americans in the top income quintile have a retirement account compared to just 21% in the bottom quintile of income. (Source: NBER)

6. WILL THEY PARTICIPATE? On December 15, the Chinese government began a nationwide rollout of its private pension savings program, which allows participants to contribute up to 12,000 yuan into tax-sheltered accounts. While the number of eligible participants will increase to 700 million, of the 60 million participants currently enrolled in the pilot program, only 22% have made any deposits. (Source: Bloomberg)

7. 529s TO INCREASE – New regulations allowing the unused portion of 529 college savings accounts to be rolled over into a Roth IRA without incurring any taxes or penalties will increase utilization of these accounts. A survey from Backer found that 76% of those who don’t have a 529 plan yet will be more likely to open an account. (Source: Financial Advisor)

8. MORE SICK TIME – The American Medical Association found that Americans spend 12.4 years of their total lives with disease, which is more than any other of 183 WHO member state. Since 2000, the US gap between average lifespan and health-span (time spent healthy) increased from 10.9 years in 2000 compared to an increase in the global average from 8.5 to 9.6 years. (Source: JAMA Network)

9. RECORD ERISA SETTLEMENT – In what is estimated as the largest ever settlement regarding a case involving ERISA, UnitedHealth Group agreed this month to pay $69 million to settle a lawsuit accusing the company of intentionally keeping “a suite of poorly performing target date funds” on its retirement plan investment platform. (Source: Benefits Pro)

QUESTION: Older generations of Americans will pass down $105 trillion in wealth to younger generations over the next 25 years. Of those receiving an inheritance, the amount received currently represents an average of about 25% of their net worth. What percentage of Americans receive funds from a deceased family member?