The retirement industry is expected to witness a significant shake-up, with innovation and evolving participant needs set to reshape it. From advancements in automation to advanced data analytics and participant engagement tools, plan sponsors have increased opportunities to deliver greater value to participants.
Retirement assets in the US now comprise roughly 40% of total family wealth, a rise from 36% in 1989. Thanks to defined contribution assets, especially 401(k) plans, which are major drivers of this growth, we could see this number increase in the coming years. This highlights the need for plan sponsors and recordkeepers to stay ahead of the curve and lead this shift. Ready to explore the trends that will shape the future of retirement management? Let’s dive in!
Emerging Retirement Plan Industry Trends in 2025
Let us start by taking a deep dive into how most forward-thinking companies are responding to the future by shaping their company’s retirement plans to address their employees’ retirement needs. Here are a few examples of retirement trends that you’ll need to keep an eye out for in 2025:
Autoenrollment and Self-service Tools
Companies are now turning to auto-enrollment for their employees into 401(k) plans, integrating services like digital tools and robo-advisors to help participants manage their investments. Self-service tools are also expected to be more prominent in the future to help participants improve access to plan information.
Promotion of Health Savings Accounts
Health Savings Accounts (HSAs) are integral to retirement planning. They help account holders and their families save money for healthcare needs and associated costs after retirement. This comes after rising healthcare premiums for the average family, which increased 47% from 2013 to 2023. This highlights the need for participants to prepare for rising medical expenses as they age.
For employees facing rising healthcare costs, pairing a high-deductible health plan with an HSA could be a cost-effective option. This would allow participants to stretch their medical dollars and build up their savings in their accounts, even on a tax-deferred basis.
Retirement Plans as Part of Overall Financial Wellness Benefits
According to a 2025 Priorities for Business Leaders survey, 86% of business leaders cited economic uncertainty as a high-impact business challenge. The rise in inflation and economic uncertainties have raised employee concerns about managing their day-to-day expenses, debt, and healthcare costs. Thus, employers may integrate retirement plans into their financial wellness programs to help employees feel more confident about combatting stress around money matters. Personal financial coaching, online education, credit resources, and budgeting tools may be included in these programs.
Auto-Portability for 401(k) Plans
The auto-portability feature for 401(k) plans that automatically transfer small-balance retirement savings when participants switch jobs has become increasingly popular and may be an essential part of retirement plan design from 2025 onwards. This feature aims to prevent 401(k) account leakages in case a loan is taken and not paid back on time or when their 401(k) does not get rolled over to an IRA retirement savings plan when moving from one company to another.
Adopting this feature ensures the risk of premature cashouts and helps participants save consistently throughout their careers.
Regulatory Changes and Laws Impacting Retirement Plans in 2025
As we move closer to 2025, new retirement laws can offer expanded opportunities for plan sponsors and participants. Some of the new regulations and laws include:
SECURE 2.0 Act Updates
From January 1, 2025, additional SECURE 2.0 changes will begin to take effect, starting with new catch-up contribution limits for participants aged 60 to 63. Under the new provision, they can make larger catch-up contributions – above $10,000 or 50% more than their regular catch-up contribution amount for that year. The limit will be adjusted for inflation from 2026 onwards to keep up with rising costs.
The upcoming SECURE 2.0 update also mandates employers auto-enroll eligible employees with a contribution rate of 3% and 10% of their salary unless they choose a different enrollment rate or opt out of the program. Additionally, from January 1, 2025, long-term part-time employees who are 21 and have completed two consecutive years of service will be added to their workplace retirement plan.
Changes in 401(k) Plans
Significant changes are coming to 401(k) plans in 2025, opening up opportunities for older participants to save more money. In November, the IRS revealed higher contribution limits for next year, increasing employee deferrals to $23,500 from $23,000 in 2024. According to a CNBC survey, roughly 6,700 adults in the U.S. need to catch up in retirement planning and savings, for which the IRS has announced an increase in the Defined Contribution limit for 401(k) plans from $69,000 in 2024 to $70,000 in 2025. This enables older workers to save more for retirement and keep up with rising healthcare costs.
Stay Ahead of Emerging Retirement Trends in 2025
The future of the retirement plan industry is all about delivering value through innovation and strategies catering to participants’ needs. As plan sponsors, adapting to emerging trends like AI-driven insights, self-service portals, and new regulations is key to staying competitive and meeting participant expectations.
For that, Congruent Solutions offers advanced automation capabilities and participant engagement tools to help you stay ahead of the curve and drive your participants toward a future-ready retirement. Contact us today if you’d like to know more about our services!