Why growing optimism about retirement does not necessarily mean employees are financially prepared

Retirement confidence among U.S. workplace retirement plan participants has improved, but new research suggests that confidence and financial readiness do not always move together. The 2026 MFS Global Retirement Survey found that 41% of participants are very or extremely confident they will be able to retire at their desired age, up 13 percentage points from 2025. At the same time, nearly three-quarters expect they will need to save more than planned, while 60% expect to work longer than originally anticipated.

The contrast becomes clearer when looking at participants’ day-to-day financial pressures. 75% say competing financial priorities are preventing them from saving adequately for retirement, with inflation, housing costs, and emergency savings among the concerns affecting participants.

For plan sponsors, these findings suggest that retirement readiness is influenced by more than a participant’s level of confidence. Employees may feel positive about their long-term prospects while still facing financial decisions that make consistent retirement saving difficult. This makes the structure and support surrounding a workplace retirement plan increasingly important.

A retirement plan should therefore be considered in the context of the workforce it serves. Plan design, participant needs, and the overall experience of using the plan can all influence how effectively employees are able to work toward their long-term goals. A standardized approach may not always reflect the different financial circumstances, demographics, and priorities within an organization.

RetireBetter provides customized retirement solutions across 401(k), 403(b), 457(b), and Cash Balance plans, with professional service and plan administration. Its 401(k) plans are designed around each client’s business rather than an off-the-shelf structure, while its Plan Administration services can help employers manage ongoing administrative responsibilities and compliance requirements.

The MFS findings are a reminder that retirement readiness is not captured by confidence alone. For employers, thoughtful plan design can help create a retirement benefit that better reflects the needs and circumstances of the workforce.