Mix of Participant Optimism and Anxiety Offers DC Plan Sponsors New Avenues for Engagement

While Americans seldom feel certain about retirement, AB’s latest survey, Inside the Minds of Plan Participants, suggests that may be changing. Defined contribution (DC) plan participants are feeling increasingly confident about their retirement prospects—even amid heightened inflation. But there’s still work to do, and rising prices may offer plan sponsors new chances to connect with participants.

What’s Up? Confidence About Retirement

In our survey of more than 1,000 DC plan participants, 35% say they’re confident or very confident about retirement. That’s below the 47% high-water mark registered prior to the pandemic, but it’s still a solid figure when you consider the reemergence of inflation—an issue that had been all but buried for the past three decades. The 35% confidence level also exceeds the longer-term 29% average over nearly two decades of AB surveys (Display).

Confidence About Retirement Is Above Long-Term Average

Source: AllianceBernstein (AB), Inside the Minds of Plan Participants, 2023

At first blush, some of our results may seem counterintuitive. For example, you might assume older DC plan participants with more assets would be the most confident about retirement. But in our survey, those closest to retirement—aged 55–64—are the least confident, while savers under 35 express the most confidence. Perhaps younger savers feel that time is on their side, though the responses could also reflect younger savers’ indifference to something that feels very distant from their present lives.

While confidence is up from a historical perspective, that still leaves roughly two-thirds of plan participants feeling unsure about retirement.