Fidelity, Fed raise red flags on 401(k)s, IRAs

Working Americans consistently find several paths to reaching their retirement goals.

My years of reporting on people’s personal finance priorities have taught me that there are many ways to achieve long-term financial success. We’re all individuals with varying circumstances and life experiences, for whom many solutions to financial concerns can work.

A new study from Fidelity Investments examines how Americans are viewing and planning for retirement. It focuses on those with 401(k) plans, Individual Retirement Accounts (IRAs) (and other plans), how people take divergent paths into post-career life, and includes the patterns followed by different age groups.

“As each generation moves into their next life phase, competing savings priorities have them reimagining the idea of retirement,” according to Fidelity’s 2026 State of Retirement Planning report. “The rising cost of living is the leading competition among all groups, and Gen X in particular is focused on paying off debts.”

But the report reveals a warning about retirement confidence levels across generations.

Fidelity reports retirement confidence by age

Among Gen Z, 23% report not feeling confident they can retire the way they want, according to Fidelity. Millennials show a similar result, with 20% not confident.

More urgently, Gen X reports 36% are not confident, while 29% of Boomers say they lack confidence in their retirement savings, including in their 401(k)s, IRAs and Roth IRAs.

A 2025 report from the Board of Governors of the Federal Reserve System puts some of Fidelity’s findings in the context of how many Americans are using retirement savings accounts.

“Sixty-seven percent of adults had assets that are specifically designated for producing income in retirement,” the Fed reported. “This included the 61 percent of adults who had a tax-preferred retirement account, including employer-sponsored defined contribution plans such as 401(k)s, Individual Retirement Accounts (IRA), or Roth IRAs.”

Fidelity explains retirement planning shift

Fidelity found that alternative thinking about retirement is becoming mainstream.

Many Americans are shifting toward a “new retirement playbook,” Fidelity wrote, reimagining what the next stage of life can look like and mapping out how they’ll gradually transition into different forms of engagement, including continued work in new or flexible ways.

More on personal finance:

Zillow forecasts big mortgage change for U.S. housing marketAARP sounds alarm on major Social Security problemDave Ramsey bluntly warns Americans on 401(k)s

“In fact, 61% of Americans say they intend to transition into retirement,” according to a Fidelity news release about the study. “Among all respondents, the top alternatives include gig work and side hustles (35%), starting a small business (29%), consulting part-time (26%), or switching industries altogether (20%).”

“Retirement is being reframed, it’s no longer a single date and instead is an adaptable stage in the next chapter,” added Rita Assaf, vice president of retirement offerings at Fidelity. “As Americans lean into this new retirement playbook, the importance of planning becomes even more pronounced.”

“Knowing what a phased or transitional path can look like in your situation — and how to make sure your financial plan, such as your withdrawal strategies and health care coverage, can work with your emotional plan — can be a differentiator in achieving the retirement you envision.”

Reports from Fidelity Investments and the Federal Reserve explain changes in Americans’ retirement savings challenges and plans.

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Federal Reserve describes retirement savings challenges

With growing concern among Americans about their expectations for Social Security, 401(k)s and IRAs are increasingly important components of one’s retirement income.

Here are some additional worries people have regarding their ability to set aside money for retirement savings, according to the Federal Reserve:

People continued to cite the cost of food and groceries as a major inflation‑related challenge, and they did so at higher rates than in previous years.One respondent said the “cost of basic goods especially groceries is way too high,” reflecting a common theme among those with incomes under $100,000, who were more likely to raise food costs as a concern.People also voiced significant worries about housing affordability, especially renters who described rising rents as a primary financial strain.One renter said their main challenge was “having enough money to pay increasing rent,” while another noted, “I am living comfortably, but still concerned I can’t afford to buy a house.”When renters were later asked why they rent instead of own, most pointed to financial constraints, as discussed in the housing section of the report.People were also asked to rate their local and national economies as excellent, good, only fair, or poor, providing a broader view of economic sentiment.Forty‑six percent of adults rated their local economy as good or excellent in 2024, which was 4 percentage points higher than in 2023 and 8 points above the series low in 2022.Despite these gains, the share rating their local economy as good or excellent in 2024 remained well below the 63% recorded in 2019 before the pandemic.
(Source: Federal Reserve)

Related: Dave Ramsey sounds alarm on Social Security, 401(k)s

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