Nearly half of U.S. households (48%) disagree with the statement, “My employer is responsible for providing for my retirement,” about the same as in 2011, according to financial benchmarking firm Hearts & Wallets (H&W) research of nearly 6,000 U.S. households, Attitudes & Sentiment 2024: Goals, Beliefs and Needs in an Era of Rising Financial Confidence.
It is unclear whether this means they don’t think their employer should be responsible, or that their employer is simply not accepting responsibility. More key findings:
- Americans are increasingly open to leaving money in former employer retirement plans, with 21% in 2024 agreeing vs. 15% in 2011.
- Feelings of being experienced as investors are the highest in 15 years, as long-term trends indicate a growing perception in the value of paid financial advice.
“Consumer empowerment and advice from a paid investment professional may seem contradictory, but they aren’t,” said Laura Varas, Hearts & Wallets CEO and founder. “As more U.S. households gain confidence in investing, they’re becoming more self-reliant in making financial decisions, yet with self-reliance comes the increasing realization of the value paid advice. Winning service models will cater to consumers who are empowered and seek professional advice.”
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We asked Varas more about consumers’ increased confidence in investing and what employers might need to do to support employees’ retirement efforts.
Q. Should employers be responsible for employees’ retirement?
A. That’s a tough question. I think no one fully realized how big a shift it was when workplace tenures got shorter, and employers stopped thinking of employment as a lifetime, mutual commitment. Especially for the lowest-income workers, the case could be made that the decrease in compensation of eliminating defined benefit plans was too big of a cut.
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On the other hand, without mutual commitment of lifetime employment, it’s fairly unrealistic to consider employers for anything beyond providing a safe and compensated environment for the time working together, which surely includes access to a defined contribution plan. This may also, for lowest-income workers, involve more generous retirement contributions than are typically seen today … Most (over 75%) of full-time employees currently believe employers are not responsible for their retirement. Openness to employer involvement is up, however. As of 2024, slightly less than a quarter (23%) of full-time employees in the U.S. strongly agree that “my employer is responsible for my retirement,” up from 17% in 2017 (8-10 agreement 1-10 scale).
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Q: Why are Americans increasingly open to leaving money in former employer plans?
A: Employer plans have a strong incentive to retain assets. Plans are making it increasingly attractive to stay in plan by developing new income options. Many of these options have existed for long time. Innovations like BlackRock lifetime retirement income annuity, which they’re positioning as an asset class, and TIAA traditional, which has been around for many decades.
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Workplace plans have been stepping up disclosure of pricing. Understanding of how pricing works is a key step to improve trust. And H&W data has tracked growing consumer trust in workplace plans, which may carry over to former employer plans. By account type in 2024, high trust increased most in workplace accounts, where trust was lower than other account types in the past. Trust in workplace accounts was 34% in 2013 and increased to 47% in 2023 …
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The combination of new features and better pricing disclosures are enhancements to keep assets in plan, and some plan participants are listening. For plan participants, it isn’t going to make sense to keep assets in plan. This includes wealthier households who may need to engage in wealth planning. Finally, advice is getting generally better in the workplace and can handle more sophisticated questions than even five years, as we see in our Inside Advice Database where we conduct benchmarking of advice experiences.
Q: Why are feelings of being experienced as investors at a high level?
A: A big part of why investors say they became more experienced is because they engaged with professional paid advice. So, the trend of realizing the value of paid professional advice goes hand and hand with feeling more experienced as an investor. At the same time, younger consumer investors, in particular, are more experienced than they were a decade ago. They’ve witnessed their boomer and Gen X parents preparing for retirement, and young investors, in my view, are surprisingly focused on retirement. Young investors today have access to a host of solutions that didn’t exist a decade ago, not least of which is [stock trading platform] Robinhood. I do worry about younger investors trading options and hope younger investors come to embrace managed products, which are in my view, a more prudent investment solution, than doing potentially riskier actions like trading options.
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H&W data shows over 1 in 3 U.S. households under age 35 (37%) made at least 1 or more options trades in the past year. Of these, 1 in 3 (30%) made 12 or more options trades. The stock market’s steady performance, which has gone up with a few small dips, since the dramatic downturn in the spring of 2020 during COVID, has certainly also promoted positive feelings for investors.
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Q. Is there a growing perception in the value of paid financial advice for employees?
A: Yes, employees are also experiencing a growing perception in the value of paid financial advice over the long term … We found an increase in full-time U.S. employees (survey respondents) who “see value,” going from 22% in 2017 to 36% in 2024 (8-10 agreement on scale of 1-10).
In addition, full-time employees (respondents) who rely on paid investment professionals show an increase, going from 48% in 2027 to 61% in 2024. Rely on paid investment professional advice/information, looking at the highest levels of reliance: Usually – 14% in 2017 to 26% in 2024 Go-to/primary – 13% in 217 to 15% in 2025
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