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43% Lose Confidence in Economy as Inflation Fears Climb

Emotional Optimism Fails to Translate Into Financial Readiness

Americans Worry About Retirement, But Few Have a Plan

The IRALOGIX Retirement Readiness Index (IRRI) held steady at 45.1 in the second quarter of 2025, down slightly from 45.8 in Q1. This stability comes even as 43% of respondents say they’ve lost confidence in the economy and 71% worry that inflation will erode their retirement savings. An IRRI score below 50 signals “Moderate Risk,” meaning many pre-retirees could struggle to maintain their standard of living in retirement without enough savings, healthcare planning, or financial confidence.

IRALOGIX launched the Retirement Readiness Index (IRRI) in March 2025 to give a clear, national view of how prepared Americans are for retirement. The IRRI turns the complex challenges of retirement planning into a single number that can be tracked over time. Using data from a nationally representative survey, the index measures readiness across five key areas: Savings and Investments, Healthcare Readiness, Lifestyle and Spending, Emotional Well-being, and Economic and Policy Confidence.

“The fact that our Retirement Readiness Index barely moved this quarter shows that many Americans are experiencing inertia when it comes to getting ready for retirement,” said Peter de Silva, CEO of IRALOGIX. “People are feeling the pressure from market ups and downs and an uncertain economy, but too many aren’t taking the steps needed to strengthen their plans. Now is the time to act if Americans want to move from just getting by to building a secure retirement.” 

Retirement Readiness: Potential vs. Reality

When analyzing the results, each retirement readiness category (such as Healthcare or Savings and Investments) was assigned a maximum number of points it could contribute to the overall Retirement Readiness Score. This represents the “full potential” if Americans were perfectly prepared in that area. Based on survey responses, the “potential achieved” percentage tells us how much of that maximum was actually reached. The lower the percentage, the further away Americans are from being fully prepared in that dimension.

Where Americans Are Falling Behind: The Weakest Dimensions

Healthcare Readiness: 36.7% of Potential Achieved

Out of 15 possible points, Americans achieved just 5.5 points, equating to 36.7% of the ideal in this critical area. This is a decline from last quarter’s 42.1%, making it again the lowest-performing dimension.

Many Americans still lack a clear plan for managing healthcare costs in retirement, from long-term care to unexpected medical bills. This gap leaves them vulnerable to the kinds of financial shocks that can derail even the best-laid retirement plans. Confidence in Medicare’s ability to meet future needs is low, and concerns about financial ruin from chronic illness or elder care persist. This aligns with past findings that healthcare costs are a primary reason retirees withdraw more than planned, underscoring that healthcare continues to be underprioritized before and during retirement.

Economic and Policy Confidence: 42.0% of Potential Achieved

Out of 20 possible points, Americans achieved 8.4 points, equating to 42.0% of potential, down from 50.8% last quarter.

Confidence in handling economic and policy changes is slipping. Persistent inflation, uncertainty about Social Security, market swings, and trade disputes have left many Americans uneasy about their financial future. While some are using tax-advantaged retirement accounts, many aren’t taking full advantage of these tools. Inflation remains a top concern, highlighting the need for practical guidance to help pre-retirees protect their savings against rising costs.

Savings and Investments: 42.3% of Potential Achieved

This category, the largest influencer of overall readiness, has 35 possible points. Americans achieved 14.8 points, reaching 42.3% of potential, slightly down from 43.2% last quarter.

Even with markets stabilizing, many Americans aren’t saving enough and don’t know if what they’ve set aside will last. Confidence in having enough for retirement is still low. Too few people have written plans, and many aren’t working with advisors to strengthen their strategies. Inflation is also making it harder to boost contributions. Tools like auto-escalation, IRA funding, and catch-up contributions can help, but more Americans need to take advantage of them to improve their readiness. 

Where Americans Are Doing Better: The Strongest Dimensions

Emotional Well-being: 55.9% of Potential Achieved

Out of 15 possible points, Americans achieved 8.4 points, equating to 55.9% of potential, up from 48.3% last quarter, making it the highest-scoring dimension this quarter.

Many Americans feel emotionally prepared for retirement. Strong social ties, hobbies, and plans for staying engaged give them a sense of optimism about this next chapter. But many still haven’t talked with family about their plans or mapped out how they’ll handle the transition, which can lead to stress down the road. Advisors have a chance to help turn this positive outlook into concrete steps that support a smoother, more secure retirement.

Lifestyle and Spending: 48.6% of Potential Achieved

Out of 15 possible points, Americans achieved 7.3 points, equating to 48.6% of potential, up from 46.5% last quarter.

Americans are getting slightly better at matching their retirement plans with the lifestyles they want. Still, many don’t have a clear spending plan or a realistic budget for retirement that accounts for rising costs, healthcare, and changing income sources. Many people continue to rely heavily on income that isn’t guaranteed and expect they will need to work during retirement. For many, retirement now means part-time or phased work, driven by both financial needs and personal choice.

“The IRRI makes it clear that while many Americans feel ready for retirement emotionally, they aren’t financially prepared where it counts,” said de Silva. “It’s troubling to see declines in healthcare planning and confidence in the policy environment. Pre-retirees can’t afford to ignore these gaps. This is where employers and advisors can step up to help people turn good intentions into real plans. Emotional optimism is a good start, but it needs to lead to financial readiness if Americans want to retire with security.”

“The latest IRRI results show that being worried about the future isn’t the same as being ready for it,” said Pete Littlejohn, President of IRALOGIX. “Americans have real concerns, but many aren’t taking the steps they need to protect themselves. This is where advisors, employers, and providers can step in to help people move from worry to action.” 

Looking Ahead

IRALOGIX will redeploy the IRRI to track trends over time to elevate the national conversation around retirement readiness, paving the way for Americans to retire with dignity and security.

Methodology

The IRALOGIX Retirement Readiness Index score is a data-driven measure of how prepared Americans are for retirement, expressed on a scale from 0 to 100. The score is derived from a nationally representative survey in which respondents answered 20 questions across five dimensions. Each question was rated on a 1-5 scale, with responses converted to a 0-100 score and weighted according to its importance within its category. The five dimensions were also weighted based on their overall contribution to retirement readiness, with financial preparedness emphasized the most. Each respondent’s weighted scores were totaled to generate an individual readiness score. The national Retirement Readiness score reflects the average of all responses. Risk zones in the IRRI are based on common indexing practices and are: High Risk (0-34.9), Moderate Risk (35 – 49.9), Caution Zone (50-64.9), Prepared (65-79.9), and Retirement Ready (80-100).

The survey was conducted in late June 2025 on behalf of IRALOGIX. Respondents were drawn from a national sample of pre-retirees.

To schedule an interview or for more information on the survey results or the index, contact Scott Sunshine.

We’re all consumers, and our expectations are shaped by the best experiences we’ve had, not just in finance, but everywhere. Ordering dinner, checking a bank balance, streaming a show, booking a flight – it’s all fast, intuitive, and seamless. So when something feels clunky or confusing, it stands out. And not in a good way.

In this space, it matters more than ever. People don’t wake up excited to manage their savings. They’re juggling jobs, families, bills, and the rest of life. If checking in on their retirement account feels like work, they’ll put it off – or ignore it entirely.

That’s why user experience can’t be an afterthought. If we want people to save and stay engaged,  the process has to feel simple, clear, and worth their time. Not just usable, but effortless.

This isn’t about copying consumer apps or adding flashy features. It’s about respecting people’s time. Removing friction. Making it easier to do the right thing without needing a manual or a phone call.

The bar is high because it should be. And the platforms that clear it are the ones that will earn people’s trust – and keep it over the long haul.

Good experience design isn’t a luxury anymore. It’s the expectation.

What’s one digital experience that raised your expectations, and how can we bring that simplicity to retirement saving?

Helping people save for retirement isn’t just about offering good plans; it’s about making good decisions easier. Behavioral science shows that small changes in how choices are presented can have a big impact on participation and long-term savings.

The biggest barrier? Inertia. Most people want to save but feel overwhelmed or unsure, so they delay taking action.

That’s where smart defaults come in. Automatically enrolling employees in a retirement plan, while allowing opt-outs, significantly boosts participation. It reduces friction and helps people follow through on intentions. One click can turn a hesitant saver into a committed one.

Nudges matter too. Prompts to increase contributions, well-timed reminders, or modest default rates can gently guide people toward better habits without pressure.

And because the future feels abstract, tools that make it more tangible, like lifestyle projections or dollar-value comparisons, can build stronger motivation to act now.

Clarity is just as important. Less jargon, fewer choices, and simple explanations give people the confidence to engage and make decisions that stick.

In short, better design leads to better outcomes. For retirement providers, the goal isn’t to push harder, it’s to guide smarter.

What’s one small change you think would make it easier for more people to start saving for retirement?

The retirement system has shifted dramatically since 1974, when IRAs were first introduced. It’s time to rethink the system and consider how changes in behavior, coverage, and technology impact how people save.

The system was built for a narrow definition of worker – someone who spends most of their adult life employed full-time by one or two companies, steadily earning, steadily saving, and eventually retiring with a pension or a robust 401(k). That kind of career trajectory is more myth than reality now, and for many people, it never existed in the first place. If we want a retirement system that includes everyone, we need to start thinking bigger, broader, and smarter.

Too many people don’t have access to any retirement plan at all. In the U.S., nearly half the workforce lacks a workplace retirement savings option. We’ve built a system that works if your job fits a certain mold. But work has changed. Millions of people are now freelancers, contract workers, part-time employees, caretakers, or in other roles that fall outside the traditional employer-sponsored benefits model. If the system doesn’t evolve, these people are left behind. But personal solutions alone, no matter how well designed, can’t close the access gap or replace the need for a broader, systemic fix. We need something universal. A default, opt-out retirement savings plan that follows people from job to job, industry to industry, life stage to life stage. Retirement savings should be automatic, portable, and accessible to every worker regardless of their employment classification.

That also means designing around real lives. Life is rarely linear. People take breaks to raise children, go back to school, care for aging parents, recover from illness, or simply navigate a tough economy. These aren’t anomalies. They’re part of the human experience. An improved retirement structure would allow people to pause and restart without losing ground. It would credit people for unpaid care work, which is essential to our society but completely undervalued in the way we allocate retirement benefits. There should be mechanisms in place to let people contribute more in years when they can afford it and less when they can’t, without penalties. The system should flex with your life.

Another barrier is complexity. The retirement planning process is intimidating for the average person. Most people don’t have the time, training, or desire to become amateur financial advisors just to avoid running out of money in their 80s. Yet the system requires that they select the right investment options, weigh risk, calculate withdrawal rates, and plan for a retirement that could span three decades or more. This is not a realistic expectation. We need simpler, smarter defaults. Low-fee, diversified funds should be the baseline. Lifetime income options should be automatically available – not just lump sums. And the entire experience should be designed with behavioral insights that help people stay on course.

Transparency and trust are critical, too. People are naturally wary of systems they don’t understand, and retirement finance has jargon, hidden fees, and fine print. Every account statement should be easy to read and impossible to misinterpret. And every person should have a simple, consolidated view of their retirement picture in one place, no more juggling accounts or guessing at the total. Technology can deliver this.

Ultimately, building a retirement system for everyone isn’t just a technical challenge, it requires rethinking retirement from the ground up.

For decades, retirement planning has leaned heavily on one idea: if people just understood more about money, they’d save more. Financial literacy has been treated as the fix-all , a belief that with enough education, people would make smarter choices and arrive at retirement financially secure. But the results have been underwhelming. Workshops, pamphlets, webinars all try to teach the same core principles, yet millions of Americans still fall short of what they’ll need in the years ahead.

The problem isn’t just a lack of knowledge. It’s that most retirement systems weren’t built for the way people actually behave. They’re clunky, confusing, and rarely intuitive. We’ve created platforms that require people to become part-time financial analysts, and then we fault them when they freeze up or tune out.

The truth is, saving for retirement isn’t only a math problem, it’s a design problem. User experience, or UX, plays a far bigger role in savings outcomes than most of the industry has acknowledged. And until that changes, we’ll keep seeing the same patterns: people opting out, falling behind, or never engaging at all.

Think about how people interact with digital services in the rest of their lives. We plan trips, shop, bank, and communicate through interfaces that are designed to be seamless. The best tools anticipate what we need before we ask. They guide us through choices with simple language and visual feedback. They don’t assume we read the terms and conditions – they build trust through clarity. Yet when it comes to retirement, the user experience is often stuck in the past. Enrolling in a plan can feel like navigating tax software. Picking investments feels like guessing on an exam. There’s jargon, legalese, and decisions that seem high-stakes but are poorly explained. It’s no wonder so many people give up before they start.

What’s missing is empathy, not just in tone, but in structure. UX design is fundamentally about reducing friction. It’s about helping people do the right thing without making it a chore. A well-designed retirement platform doesn’t push every option upfront. It starts simple and grows with the user. It offers context when needed. It nudges without nagging. And it celebrates small steps, like increasing a contribution or reviewing account performance, rather than waiting until someone hits a six-figure balance to offer praise.

Research backs this up. When plans automatically enroll employees instead of asking them to opt in, participation jumps. When people see clear visuals of how their savings today can translate into income later, they’re more likely to take action. When the experience feels manageable – not overwhelming – people stay engaged. These aren’t just design tweaks. They’re behavioral levers that can drive real financial improvement.

Unfortunately, most retirement platforms still treat UX as an afterthought. Interfaces feel like they were designed to satisfy legal teams, not actual users. They assume financial knowledge instead of offering it in digestible ways. They ask users to make decisions before building their confidence to do so. That kind of friction leads to paralysis, and over time that paralysis can cost people years of lost compounding.

Designing better tools starts with recognizing that users aren’t spreadsheets. They’re people with limited time, varying degrees of financial comfort, and more immediate concerns than “what will I live on in 35 years?” Retirement isn’t just about saving money; it’s about creating a sense of future stability. The UX needs to reflect that with less complexity, more encouragement, and a tone that respects the reality of everyday life.

Some providers are beginning to move in this direction, developing platforms that are more inclusive of individuals outside traditional employer-sponsored systems. Rather than overwhelming users with information up front, these approaches prioritize usability and guidance, making it easier for people to take action even if they’re starting from scratch. The emphasis is shifting from expecting perfect financial knowledge to designing tools that support real-world decision-making.

The larger lesson here is that we can’t wait for people to become experts. We have to meet them with systems that remove the guesswork. The future of retirement planning depends on making it feel doable, not daunting. When UX leads the way, the barriers come down. The decisions get clearer. And the outcomes improve – not because people got smarter overnight, but because the systems finally got smarter for them.

There’s still a role for education, but it’s not the silver bullet. What people need most isn’t another seminar or handbook. They need platforms that make it easier to start, easier to stay on track, and easier to feel like they’re making real progress. If we want better retirement outcomes, we need to build better experiences. And that starts not with teaching people to adapt to the system but designing systems that adapt to people.