Retirement Reality Check: Security Declines as Personalization Becomes Paramount

Charlotte, N.C. – November 4, 2025 – A new study from Allspring Global Investments paints a concerning picture of retirement security in America, revealing a significant decline in confidence among those nearing and in retirement. The report, titled “By Default or By Design?”, highlights a growing disconnect between traditional retirement planning approaches and the increasingly complex needs of individuals, prompting calls for more personalized solutions and a reevaluation of the ‘one-size-fits-all’ model.

The study, which surveyed over 1,500 U.S. adults, found that only 60% of retirees and near-retirees feel financially secure – a marked decrease from previous years. The decline is particularly pronounced among younger retirees (ages 65-69), where confidence has fallen by 15%, and older near-retirees, seeing an 8% drop. This erosion of confidence comes amidst broader economic anxieties and challenges to the traditional retirement framework.

“We’re seeing a clear signal that the default retirement solutions aren't working for everyone,” explains a source familiar with the study’s findings. “Individuals are realizing that their unique circumstances, goals, and risk tolerances aren’t being adequately addressed. They need a plan that’s tailored to them.”

The Demise of 'Set It and Forget It'

The study revealed a surprising rejection of target-date funds, a popular default option in many 401(k) plans. A staggering 84% of near-retirees expressed a preference for investment options other than these automatically adjusted portfolios. This indicates a growing desire for greater control over investment decisions and a skepticism towards automated solutions.

“People are waking up to the fact that target-date funds, while convenient, are often based on broad generalizations,” says a financial advisor who reviewed the study. “They don't account for individual circumstances, like unexpected healthcare expenses, early retirement plans, or a desire to leave a legacy.”

The Tax & Social Security Blind Spots
The report also identified critical gaps in financial literacy, particularly concerning tax-efficient withdrawal strategies and Social Security optimization. Only 20% of near-retirees and retirees utilize strategies to minimize taxes on their retirement income, and a mere 10% could accurately answer basic questions about Social Security claiming rules. This lack of knowledge is costing individuals significant amounts of money.

“It’s alarming how many people are leaving money on the table simply because they don't understand the rules,” notes an expert in retirement planning. “Delaying Social Security benefits, for example, can significantly increase monthly payments, but many individuals claim benefits as soon as they're eligible.”

A Crisis of Confidence – Broader Trends at Play

The decline in retirement confidence documented by Allspring aligns with broader trends observed by other research organizations. The Employee Benefit Research Institute’s (EBRI) 2024 Retirement Confidence Survey reveals a 12% drop in confidence among Americans aged 55+, while a recent report from the Government Accountability Office (GAO) highlights the growing challenges facing the retirement system. These trends are fueled by factors such as wage stagnation, rising healthcare costs, and the decline of traditional defined-benefit pension plans.

“We're seeing a perfect storm of factors eroding retirement security,” says a policy analyst specializing in retirement issues. “People are working longer, saving less, and facing increasing financial pressures. The old playbook just isn’t working anymore.”

AI and the Promise of Personalization

Amidst these challenges, artificial intelligence is emerging as a potential tool for revolutionizing retirement planning. AI-powered platforms can analyze vast amounts of data to create personalized investment strategies, optimize tax planning, and project future retirement income with greater accuracy. However, the adoption of AI in this space is still in its early stages.

“AI has the potential to address many of the shortcomings of traditional retirement planning,” says a fintech executive specializing in AI-powered financial solutions. “It can provide personalized advice at scale and help individuals make more informed decisions. But it’s important to remember that AI is just a tool. Human oversight is still essential.”

Concerns remain about data privacy, algorithmic bias, and the potential for AI to exacerbate existing inequalities. Experts emphasize the need for transparency, accountability, and ethical considerations in the development and deployment of AI-powered retirement solutions.

A Call for Action
The Allspring study serves as a wake-up call for individuals, financial advisors, and policymakers. It underscores the need for a more personalized, proactive, and informed approach to retirement planning. Individuals must take ownership of their financial futures and seek professional guidance when needed. Financial advisors must embrace new technologies and develop solutions that address the unique needs of their clients. And policymakers must enact reforms that strengthen the retirement system and ensure that all Americans have access to a secure retirement.

“The days of ‘set it and forget it’ are over,” concludes a source familiar with the study. “We need to move towards a model that empowers individuals to take control of their financial futures and build a retirement that’s tailored to their dreams.”