Cerulli: Younger Workers Expect to Use 401(k)s as Primary Retirement Income

Core Insights - The primary concern for both active (34%) and retired (35%) 401(k) plan participants is the risk of outliving their retirement assets [1] - Inflation is a significant worry for 17% of active participants, while 19% of retired participants cite economic downturns as their top concern [2] - A majority of Gen Z (58%) and millennials (58%) expect their 401(k) accounts to be their main source of retirement income, aligning with 49% of all age groups [4][5] Group 1: Participant Concerns - 34% of active and 35% of retired participants are most concerned about their retirement assets lasting [1] - 18% of active and 32% of retired participants worry about health changes [1] - 17% of active participants identify inflation as their top financial worry, while 19% of retired participants cite economic downturns [2] Group 2: Generational Perspectives - 5% of Gen Z and 16% of millennials plan to rely on Social Security as their primary income source in retirement [3] - 33% of Gen Z feel "very confident" about maintaining their standard of living in retirement, compared to lower confidence levels in older generations [3] Group 3: Financial Advice Sources - 38% of active participants without a financial advisor rely on their retirement savings account provider for advice [6] - 24% seek guidance from their current or former employer, while 13% do not seek outside advice [6] Group 4: Spending and Loans - 58.5% of households taking out loans from their defined contribution plans saw healthcare spending rise by 10% or more [9] - 10.9% of DC plan participants took out a loan during the year of interest, with the highest prevalence among those aged 40-59 [11] - Participants with higher credit card debt are more likely to take out loans, with 20% of those with a high credit card debt/limit ratio doing so [12]