PLAN SPONSORS AND PARTICIPANTS VIEW RETIREMENT READINESS AND RETIREMENT TOOLS DIFFERENTLY

Participants' retirement readiness confidence and risk tolerance drops while wanting more from plan sponsors in American Century Investments' 12^th annual retirement survey

KANSAS CITY, Mo., Oct. 28, 2025 /PRNewswire/ -- American Century Investments®, a recognized leader in retirement solutions, today released the findings of its 12th annual national retirement survey, revealing a disconnect between retirement plan sponsors and participants. The survey captures the evolving priorities, anxieties and expectations shaping the future of retirement in America.

Key Findings: The Retirement Disconnect

Despite sharing a commitment to retirement readiness, plan sponsors and participants show gaps in their perceptions of participant preparedness, risk tolerance and how common retirement products work:

• Confidence Gap: While 56% of plan sponsors believe employees are prepared to manage finances without a paycheck in retirement, only 42% of participants feel the same. Fewer than half of participants feel prepared to navigate key decisions in the transition to retirement, and just 30% say they could retire earlier than expected if needed due to health or caregiving needs.
• Risk Tolerance Mismatch: Only 19% of participants describe themselves as "very accepting" of market risk, down from 24% last year, yet sponsors tend to overestimate participant comfort with investment loss. Almost half of participants (46%) near retirement age are comfortable with losing only 10% or less of their account balance, while plan sponsors believe 77% of participants can tolerate a greater than 10% loss. Two in three participants say they remain calm during market downturns, but confidence in bouncing back from losses has slipped (59% in 2025 vs. 63% in 2024).
• Target Date Fund (TDF) Confusion: 68% of participants prefer moderate TDFs, but 38% of sponsors favor aggressive TDFs for high savers. Moreover, 62% of participants mistakenly believe TDFs provide income, and 34% think TDFs guarantee against losses, highlighting a persistent knowledge gap.

The survey additionally shows gaps between what participants and plan sponsors identify as important and what plan sponsors offer:

• Guaranteed Income Solutions: 93% of participants express interest in guaranteed income and one in three plan sponsors are actively considering it. Three in five participants would invest 30% or more of their balance in an in-plan income solution, but sponsors remain divided on implementation and education.
• Education and Income Needs: 8 in 10 participants say they need help turning savings into a reliable income stream, and 86% of sponsors agree participants need this support. Yet, only 44% of sponsors offer resources for managing finances in retirement, and just 40% provide guidance on generating income from savings.

Expertise That Bridges the Gap

"The transition to retirement creates concerns like how to turn savings into income and how to protect against market losses. We are helping advisors with important client conversations to educate and prepare individuals for retirement," said Glenn Dial, Senior Retirement Strategist, for American Century Investments. "Advisors are in the unique position to hear how much participants worry about achieving a successful retirement, whether that is having enough money or maintaining an income. They also need an advisor who can listen and understand their concerns, then respond with the best plan."

Actionable Insights for the Plan Sponsors and Participants

For Plan Sponsors: Dial suggests taking a closer look at participant risk preferences and providing tailored education on TDFs and guaranteed income options. Emphasize early and consistent saving, and offer resources that help employees turn savings into income. American Century's Retirement Income Blueprint Tool analysis can help compare the features and benefits of in-plan guaranteed income products.

For Participants: Dial feels participants should seek out educational tools, from employers and plan sponsors to better understand investment options and retirement income strategies. Get very granular with retirement goals and learn more about the products that support those outcomes. Ask advisors for support in navigating the transition to retirement.

About the Survey

The 2025 survey included 1,500 full-time workers aged 25–70 and 500 plan sponsor representatives (Director level or higher) with significant influence over their company's retirement plan. Data was weighted to reflect key demographics and plan asset sizes. For more information and to access the full survey, visit: www.americancentury.com/retirementsurvey

About American Century Investments

American Century Investments is a leading global asset manager focused on delivering investment results and building long-term client relationships while supporting breakthrough medical research. Founded in 1958, American Century Investments' 1,400 employees serve financial professionals, institutions, corporations and individual investors from offices in Kansas City, Missouri; New York; Los Angeles; Santa Clara, California; Portland, Oregon; London; Frankfurt, Germany; Hong Kong; and Sydney. Jonathan S. Thomas is chairman, chief executive officer and president, and Victor Zhang serves as chief investment officer. Delivering investment results to clients enables American Century Investments to distribute over 40% of its dividends to the Stowers Institute for Medical Research, a 500-person, nonprofit biomedical research organization with a focus on foundational research. The Institute owns more than 40% of American Century Investments and has received dividend payments of more than $2 billion since 2000. For more information about American Century Investments, visit www.americancentury.com.

*Assets under supervision as of 09/19/2025.
©2025 American Century Proprietary Holdings, Inc. All rights reserved

Contact: Lisa Patterson
[email protected]

SOURCE American Century Investments