Pre-retirees want control of decisions they cannot yet evaluate

The shift from defined benefit to defined contribution turned retirement saving into an individual assignment, and the industry has spent the decades since arguing about whether people would take the job. Edelman Financial Engines' inaugural Financial Confidence Report, reported by PLANADVISER, gives the optimists a number—84% of pre-retirees surveyed want an active role in their retirement planning and decisionmaking—and the pessimists one too, with 60% of respondents unable to say how their retirement savings are invested.

Michael Liersch, Edelman's chief planning officer, told PLANADVISER the responses argue for letting participants ask their questions and get the advice they need, an opening he framed for plan advisers and sponsors to move past a default target-date strategy and a set-it-and-forget-it posture. The direction is right, but the obstacle is steeper than a communications campaign can climb: a participant who cannot say what she owns is in no position to ask a good question about it. The report describes a diagnosis problem, not a demand problem. Read the 84 and the 60 as a segmentation model rather than a contradiction and the practical answer falls out—a minority of participants will pick a glide path if someone hands them a fee table, while the rest need the plan to make the decision and the adviser to own it. For that majority, the target-date fund is where the advice actually gets delivered.

Two other findings sharpen where paid advice sits: 48% of respondents said they feel financially stressed, mostly by forces outside their control—the economy in general at 52%, personal finances at 41%, the political climate at 26%—and 74% worry their Social Security benefits will be cut. None of those fears is unreasonable, and none is an investment input. A saver who trades around the political climate is being led by the last headline he read, while a saver given a claiming-age model is being handed a decision with real money attached. The stress list reads as a schedule of conversations that mostly are not happening in the plan.

Edelman's report measures what pre-retirees know; Schroders' 2026 U.S. Retirement Survey, also covered by PLANADVISER, measures what they expect. Among surveyed nonretired Americans, 52% said they were concerned or very concerned about outliving their retirement assets, and only 16% said they would “definitely” be able to replace 75% of their last paycheck with retirement income, with most unsure they could. Deb Boyden, who heads U.S. defined contribution at Schroders, said in a statement that the gap between saving and turning savings into a reliable income stream is a blind spot people often find too late.

That is the last mile this publication wrote about in August, when an IRIC white paper argued that underspending in retirement is a design flaw and handed advisers a playbook built on paychecks, buckets and menu changes. The accumulation side is largely solved for the participants who stayed in their plans; converting a balance into a paycheck is where the billable advice hour sits, and it is where today's menus have the least to offer.

Even a well-built advice program runs into a supply constraint this publication has written about before: Cerulli estimates that roughly 35% of advisers will retire inside a decade—the figure we cited in September, when three plan-advisory executives graded the industry's recruiting from a D-plus to a B-minus—so one adviser per participant was never the model and cannot become it now. The workable architecture is tiered: defaults for the disengaged, managed accounts for the middle, and a human for the handful of decisions that carry real money, among them the contribution rate, the glide path, the claiming date and the rollover.

That tiering is where Liersch's argument for moving past set-and-forget collides with the market fact this publication has argued: target-date construction is becoming the sale, and the competition has moved to what sits inside the default, from custom glide paths to in-plan income features. The Edelman findings do not weaken the case for defaulting participants; they raise the bar for what the default has to do, making the transition out of accumulation part of the specification rather than a footnote. A plan adviser who can write that specification, and can show a sponsor which participants need a person and which need the machine, has something to sell in the next plan search.