Long considered the final chapter of one’s working life, retirees are increasingly viewing retirement not as an endpoint, but as a new beginning. From demographic shifts to economic shake-ups, technology and evolving lifestyles, the traditional view of the golden years is undergoing a profound transformation.
Whether you work with benefits accounts, are nearing retirement yourself, or are already there, this article will help bring you up to speed with the retirement trends set to most impact providers and recipients now and down the road ahead.
Before we dive deep into trends impacting retirement, let’s zoom out and first take a look at the bigger forces at play.
People are living longer—and not by a small margin. Thanks to advances in healthcare, nutrition and overall quality of life, life expectancy in the United States and around the world has steadily increased over the last 50 years.
And this trend is expected to carry on into the coming decades, with life expectancy for the total U.S. population projected to increase by about six years, from 79.7 in 2017 to 85.6 by 2060.
While people generally living longer is great news, it also poses new challenges for retirement planning. The old notion of a 10-15 year retirement no longer holds when many people could be looking at a retirement period that lasts 25, 30, or even 40 years after leaving the workforce.
And people aren’t just living longer than ever before—they’re also living better.
Rather than settling into a quiet, passive existence, today’s retirees are chasing long-held dreams, acquiring new skills and even continuing to engage in the workforce. Retirement now represents a time of reinvention and self-discovery—requires an upgraded approach that accounts for more than healthcare costs and vacations.
The rise of the gig economy, along with remote and flexible work arrangements, has given birth to the “semi-retiree”— one who blends leisure with part-time or project-based employment as a way to supplement income, engage with others and remain fulfilled.
There are several forces driving this shift. First, working offers a sense of purpose and identity for many people, while also providing structure to their daily lives.
Second, financial realities are pushing many people to extend their working years. Social Security, while a critical safety net, often falls short of covering the costs of a comfortable retirement.
By extending their working years, retirees can supplement their fixed incomes while delaying dipping into their savings—a move that allows investments to grow and offers more financial security for the future.
With these shifts in mind, many companies are rethinking their approach to retirement planning to offer options that cater more toward employee demands for flexibility and financial wellness. Here are eight key retirement trends to keep an eye on in 2025.
The days of selecting a retirement plan based solely on fee minimization is fading fast. Instead, employers are increasingly seeking out retirement services that allow employees to self-service and personalize their 401(k) investments.
And beginning in 2025, all new 401(k) and 403(b) plans established after the enactment of SECURE 2.0 will be required to automatically enroll new employees at an initial contribution amount between three and 10%.
With healthcare premiums and treatment costs continuing to rise, Health Savings Accounts (HSAs) are gaining traction as a vital component of retirement planning. HSAs allow employees to set aside pre-tax dollars for medical expenses, both now and in retirement, offering significant tax advantages.
For companies struggling to keep healthcare premiums in check, HSAs, paired with high-deductible health plans, offer a cost-effective way to help employees manage medical expenses.
Employers can benefit from reduced healthcare premiums while simultaneously providing a valuable resource for employees navigating the complexities of medical expenses, both now and in retirement.
In 2023, the Federal Reserve reported nearly 25% of non-retired adults have no retirement savings, and for those who do, the median amount falls far below the $1.46 million a person needs to retire comfortably. With the majority of Americans behind on retirement savings, many companies are beginning to integrate financial literacy programs into their benefits packages.
As highlighted in Payroll Integrations' 2024 Employee Financial Wellness Report, these offerings range from financial counseling and workshops to digital tools designed to provide employees with the knowledge they need to better manage their finances.
For many Americans, rising living costs, mounting debt and inflation are contributing to financial stress that can negatively impact one’s ability to save for retirement. As evidenced in Payroll Integrations' State of Employee Financial Wellness Report, these realities are underscored by the near 73% of American employees who say they want more education on company benefits.
Employers can meet this demand by implementing a financial wellness program to help educate employees on their benefit options as well as provide them with guidance on the best places to start investing based on age and goals.
And for employers, the benefits of offering robust employee financial wellness programs extend beyond employee satisfaction. According to the report, organizations with well-rounded financial wellness initiatives see reduced turnover, increased productivity and stronger employee engagement—making employee financial wellness programs a win-win for both the employee and the employer.
Job mobility is becoming more common for American workers, with the median length of time employees stay with a company now clocking in at around 4.1 years. Although this timeline is typically touted as a wise move for many workers, it often leads to orphaned or fragmented retirement savings accounts.
To combat this issue, companies can implement features like auto-portability, which automatically transfers small 401(k) balances to an employee's new plan when they change jobs. This seamless process ensures retirement savings remain consolidated and easily accessible to the employee, even in the face of frequent job changes
Across the board, younger generations are increasingly interested in aligning their spending habits with companies and causes that align with their values–and that include their investments.
With this shift in mind, funds centered around strong environmental, social and governance (ESG) practices have become more prevalent in recent years as employees, especially Millennials and Gen Z, push for portfolios that reflect their values alongside strong returns.
And although Gen Z was found to participate the least in their retirement benefits, those who did contributed more than any other generation.
As companies adapt to these trends, they’re reshaping not only the retirement experience but also the broader conversation around financial wellness.
As we head into 2025, these emerging trends point to a new era in retirement planning, one where financial security and personal values go hand in hand. Employers who stay ahead of the curve will not only build stronger retirement plans but also create a more engaged and financially confident workforce.