Principal survey: AI adoption and delayed retirement

Seven in ten employers tell Principal their workers are postponing retirement because of the economic environment, with financial security the leading concern. Healthcare costs and the fear of outliving savings are also pushing retirement dates back, according to the firm's latest Financial Well-Being Index, which 401(k) Specialist covers.

Teresa Hassara, senior vice president of Workplace Savings and Retirement Solutions, said the results argue for personalized guidance. "People want to understand where they stand today and what they can do next," she said in a statement.

Employer confidence on the index has risen to 6.55 out of 10 from 6.06 in March, though it still trails the 7.25-to-8.08 readings of 2023 and 2024. 401(k) Specialist writes that the rebound could be tied to the spread of AI in the workplace. The share of employers without AI has fallen from 19% to 10%.

Asked about the next two years, 31% of employers expect AI to increase both headcount and wages, and 24% expect wages to rise while staffing stays level. Just 4% expect both to fall.

Amy Friedrich, president of Benefits and Protection at Principal, said employers are telling a more nuanced story than the job-loss narrative around AI. "Much of the public conversation around AI has focused on potential job losses, but employers are telling a more nuanced story," she said.

For plan sponsors, the two trends compound. Later retirement keeps participants in plans longer, and stable or growing payrolls keep contributions moving. The awkward part is that confidence is climbing while most employers still say workers delay retirement for financial reasons. That gap keeps income planning central.