12 Retirement Industry Trends To Watch for 2026

Retirement at age 65 with a healthy nest egg and a 401k is no longer a given for many American workers. Today’s employees are living longer, working longer, and facing greater financial complexity than those of past generations. For businesses, this means adapting retirement plans to keep pace with shifting retirement trends and changing economic conditions. To address the retirement needs of every employee, employers should look at retirement planning as a critical part of overall financial wellness.

2026 marks a pivotal year for employer retirement plans. The Setting Every Community Up for Retirement Enhancement (SECURE) Act, first enacted in 2019, introduced significant changes to the retirement landscape. The SECURE 2.0 Act, passed in late 2022, continues to build on those reforms, and many of its provisions will reach full implementation in 2026. Additionally, 21 states will have retirement mandates in place or in progress. Companies will need to re-evaluate retirement plans in light of new auto-enrollment requirements, super catch-up contributions, and state compliance deadlines.

12 Key Retirement Plan Trends Employers Need To Know in 2026

A key goal of retirement planning is to help employees secure their futures while strengthening retention and productivity. This requires strategic planning around emerging retirement trends, whether that means encouraging workers to save more for retirement or enhancing their overall financial wellness.

Here are 12 trends to track in 2026.

1. Mandatory Auto-Enrollment Under SECURE 2.0

Auto-enrolling employees in the company 401(k) plan ensures that they take advantage of the benefits available to them. Beginning January 1, 2025, the SECURE Act 2.0 mandates that any newly established 401(k) plans include automatic enrollment for eligible employees. Contributions begin at 3% of employee wages and increase by 1% every year up to 10-15%, although employees can change their contribution amounts or opt out. Businesses less than three years old and/or with 10 or fewer employees are exempt from the requirement, as well as church or government plans. Plan documents must be updated to include the regulations by December 31, 2026 (except forgovernmental plans, which have a later compliance date).

Scott Buffington, General Manager for Retirement at Paychex, says “Concerns about the future of Social Security are driving employers to encourage proactive retirementsavingand offer robust retirement plans.” To support 401(k) plans and administration, many employers use digital tools and robo-advisors to help participants manage their investments. Self-service tools can also improve access to plan information.

2. HSAs As Long-Term Retirement Savings Tools

According to the Federal Reserve's Report on the Economic Well-Being of U.S. Households in 2022 - May 2023, for 30% of retirees, health problems play a role in the decision to retire. Given the steady rise in healthcare premiums — with Kaiser Family Foundation reporting a 47% increase in average family premiums from 2013 to 2023 — employees must prepare for medical costs that will increase as they age.

Health savings accounts (HSAs) help account holders and their families save money both for present and post-retirement healthcare needs. In light of rising healthcare costs, an HSA paired with a qualified high-deductible health plan could be a cost-effective option to help employees stretch their medical dollars. Once the account owner reaches age 65, distributions can be taken for any reason without a tax penalty. Distributions other than for qualified medical expenses are taxable to the same extent as those from an IRA funded with fully deductible contributions.

Employees who stay healthy or use non-HSA funds to pay out-of-pocket medical costs can allow savings to build up in their accounts on a tax-deferred basis. In 2026, self-covered individuals may contribute up to $4,400 to their HSA, and those with family coverage accounts may contribute up to $8,750.

The IRS allows you to reimburse yourself for qualified medical expenses at any time in the future, even years or decades later, so you can keep receipts and withdraw the money after your investments have grown. This strategy takes advantage of tax-free growth while maintaining access to your contributions whenever you need them.

3. Enhanced Financial Wellness Programs for Employees

Many Americans are not saving enough to maintain their standard of living during their retirement years. This is due in part to a lack of understanding about how much is needed to retire, especially in light of inflation, rising healthcare costs, and a growing need for long-term care for the elderly.

Although the share of adults with some retirement savings has grown since 2022, only 35% of non-retirees feel on track for a comfortable retirement. Additionally, 14% have borrowed from, cashed out, or reduced contributions to their retirement accounts, according to the Federal Reserve’s Report on the Economic Well-Being of U.S. Households in 2024 - May 2025.

Prioritizing your employees' financial wellness can help bridge this gap. Resources such as financial counseling, online budgeting tools, and access to professional advice can help employees assess their financial readiness so they will be ready for retirement. When companies offer comprehensive financial wellness programs, they are more likely to see an increase in retirement plan participation and may also experience reduced turnover.

Recent legislative changes have also expanded financial wellness options for employers. The SECURE 2.0 Act introduced pension-linked emergency savings account provisions, enabling employees to save up to $2,500 for short-term needs while building long-term retirement security. The act also allows employers to match employee student loan payments with retirement contributions, helping workers save for retirement while paying down debt.

4. Offering Retirement Plans as a Part of Overall Financial Wellness Benefits

Financial well-being includes more than just saving for retirement. It's also about managing day-to-day expenses, debt, and healthcare costs. The rise in inflation and overall uncertainty about where the economy is headed has created additional financial stress for many employees. While the Federal Reserve reported that financial well-being in 2024 remained similar to the year before, 29% of those surveyed said they were worse off than the previous year. Progress toward retirement savings improved, but was still lower than 2021.

Business leaders are feeling the pressure, too: 86% of them cited economic uncertainty as a high-impact business challenge, according to our 2025 Priorities for Business Leaders survey.

As an employer, you may have a front row seat to the impact financial stress can have on employee productivity, absenteeism, and turnover. If they don’t have reliable resources to answer their financial questions, your employees will likely experience growing financial pressure.

By integrating retirement plans into a broader financial wellness program, you can help your employees feel more confident and prepared for the future, reduce stress around money matters, and feel more hopeful for the future. Financial wellness programs may also include personal financial coaching on specific topics, online education, budgeting tools, credit resources, and guidance on the best places to start investing based on age and goals.

5. Auto-Portability for 401(k) Plans

Auto-portability is an optional employer 401(k) plan feature that automatically transfers small-balance retirement savings when participants change jobs. It is an exciting retirement plan trend that aims to address a common source of 401(k) account leakage.

Here's how it works: A 401(k) is supposed to help an employee save for retirement and often represents a sizable portion of their assets. However, that nest egg is vulnerable to losses when a person takes out a loan and does not pay it back on time, takes hardship withdrawals, or does not roll their 401(k) to an IRA retirement savings plan when they leave one company and go to another. Auto-portability reduces the risk of retirement shortfalls by providing an automated plan-to-plan retirement savings direct transfer when a person moves from one employer to another.

This feature is becoming table stakes for retirement plan design because it eliminates the risk of forgotten accounts or premature cash-outs, and it helps employees keep their savings intact throughout their careers. It is even more powerful for younger workers who may change jobs frequently, especially when implemented along with auto-enrollment and automatic contribution increases.

6. Socially Responsible Investing Meets Fiduciary Standards

Socially responsible investing (SRI) and its sister strategy, Environmental, Social, and Governance (ESG) investing, involve choosing investments based on both financial returns and social/environmental responsibility (or weeding out companies viewed as socially or environmentally irresponsible). SRI gained traction quickly in its early days, particularly among Millennial and Gen Z generational groups seeking to align their investments with their values. Seeking out socially responsible investment options can help employers attract and engage employees who care deeply about the impact of their investments, while maintaining the fiduciary duty to prioritize financial returns.

However, uncertainty around these investment strategies and questions about how they align with fiduciary responsibility are points of concern for some. According to court documents, the Department of Labor is expected to consider new regulations for ESG in spring of 2026, focusing on financial considerations and risk-adjusted economic value.

7. Older Americans Working Longer Means Phased Retirement and Extended Careers Become the Norm

The average retirement age is on the rise as many older Americans work past the standard retirement age. Some older employees choose to stay in the workforce due to financial needs or personal fulfillment in their work, while others keep working to maintain health insurance benefits or continue earning income. As a result, many expect to retire later than previous generations did.

Gradually reducing hours or working a more flexible schedule is one of the most desirable ways for many Gen X and millennial employees to retire. Phased retirement models are also gaining popularity. For example:

• Reduced Hours Arrangements: Employees transition from full-time to part-time schedules (such as working 2-3 days per week).
• Consulting or Freelancing: Older workers can leverage years of expertise on a project basis.
• Encore Careers: Individuals pursue meaningful second careers aligned with personal passions or social impact.

Fear of not having enough savings or unreliable Social Security benefits lead many older workers to ease into retirement. To supplement retirement income, they may take on part-time work, such as consulting or a less time-intensive job.

Long-term effects of this trend may manifest through pressure for higher pay, labor shortages, and (further down the road) potential Social Security funding problems. Offering comprehensive financial wellness benefits, educational programs, and savings opportunities can help employees tailor their retirement planning and meet their goals.

8. Social Security Planning Becomes Critical

Over the past year, inflation has risen by 2.9%, and the Social Security Administration’s cost-of-living adjustment is expected to increase as well in 2026. However, many older workers feel uncertain about the availability of Social Security benefits upon retirement. Current projections suggest that Social Security funds could be depleted by 2033 and that the SSA will not be able to pay out more than 77% of earned benefits beyond then. For this reason, employers and workers in the U.S. continue to keep a close eye on the state of Old-Age and Survivors Insurance and Disability Insurance (OASI and DI) Trust Funds.

Given these realities, offering a retirement plan is no longer optional for employers who want to attract and retain talent. By providing 401(k) plans, matching contributions, and offering financial education, companies can help employees take control of their retirement futures. Employer-sponsored retirement plans can help relieve some of the pressure by encouraging savings at all stages of an employee’s career and reducing their reliance on Social Security benefits alone.

Employers can support this planning imperative with:

• Comprehensive Financial Education Programs: These programs help employees understand the importance of early and consistent saving.
• Higher Default Contribution Rates in Auto-Enrollment Plans: Employers can encourage employees to move beyond the minimum 3% to 5-6% or more.
• Catch-Up Contributions: For employees age 50 and older, employers can actively encourage catch-up contributions, so they have a diversified retirement income to supplement Social Security benefits.

9. Growth of AI and Digital Tools in Retirement Planning

Artificial intelligence (AI) is transforming how small and medium-sized businesses offer retirement planning. With AI-assisted platforms, employers may be able to provide tailored retirement advice without needing specialized expertise in-house.

AI-assisted tools analyze employee data and market trends to help employees make decisions about their savings and investments and take a more active role in their financial futures. For example, an AI tool can track retirement accounts and provide behavioral nudges on when and how much to invest, how to manage a retirement portfolio, and when to claim Social Security benefits. Employers and HR departments may also benefit from automated plan management, including enrollment and engagement.

To protect privacy and sensitive data, retirement planning platforms use data encryption and require informed consent about how personal information is being used.

10. Expanded Catch-Up Contributions for Older Workers

If you have employees nearing retirement age, SECURE 2.0 introduced changes to catch-up contribution limits. Beginning in 2025, employees aged 60 to 63 can make catch-up contributions up to 150% of the regular catch-up contribution limit to their retirement plans. Workers in this age category typically have reached peak earnings capacity, college loans have been paid off, and they may be close to paying off their mortgage. This often means they can channel more of their income toward retirement.

Contribution limits differ based on the type of account you have, so make sure you know which rule applies. The adjustment for the new year will be indexed for inflation giving older workers a valuable opportunity to bolster their savings as they approach retirement. Base contribution limits for 401(k) plans are projected to increase to $24,500.

For employees earning more than $145,000 in the prior calendar year, all catch-up contributions at age 50 or older must be made on a Roth account in after-tax dollars beginning in 2026.

Employers should be prepared to update their retirement plans accordingly and communicate these changes to help employees take full advantage of their retirement options. Payroll systems must be configured to track employee ages and compensation for the previous year to meet the requirements.

11. Lifetime Retirement Income Solutions Address Longevity Risk

Longer life expectancies mean that employees must plan for a retirement that could last 25 years or more. To help employees manage the risk of outliving their savings, employers can offer financial tools that provide a safety net for the retirement years. There are several different types of lifetime income products, each designed to address different retirement needs:

• Lifetime Annuities: A lifetime annuity is a type of insurance that provides guaranteed income throughout the retirement years. The annuity provides payouts beginning on a specified date and continues for the remainder of the recipient’s life.
• Other Types of Annuities: These include traditional fixed annuities, variable annuities, and hybrid products, which may also be helpful for retirement planning. Talk with your financial planner about which options are the best fit.
• Managed Withdrawal Funds: This option uses systematic distribution strategies designed to make retirement savings last throughout retirement, but it doesn't necessarily guarantee lifetime payments.

Under the SECURE Act, employers have a fiduciary safe harbor for selecting annuity providers. This legal protection significantly reduces liability concerns when selecting lifetime income options. Essentially, the requirement to exercise due diligence when choosing an annuity provider may be satisfied by evaluating the insurer's financial capability, considering the cost and benefits, and reviewing written statements from the insurer.

Incorporating lifetime income options into your employer retirement program adds value by helping your employees plan for financial security in later life. These offerings can strengthen your company's retirement benefits package and help employees achieve true retirement readiness.

12. Pooled Employer Plans (PEPs) and Long-Term Part-Time Workers

Small businesses and gig workers have historically had limited access to retirement savings options. State-mandated retirement programs and Pooled Employer Plans (PEPs) are making it easier for employers to support these workers in saving for the future.

PEPs allow multiple employers to pool resources and offer a retirement plan with reduced administrative burdens and fiduciary risks. A PEP can be a practical and cost-effective solution for smaller businesses that want to provide a competitive retirement plan with professional oversight without complexity. The pooled plan provider handles most of the administrative tasks, which can simplify compliance, help reduce the fiduciary risks for the employer, and help businesses focus on their core operations.

SECURE 2.0 has also expanded retirement plan access to long-term part-time workers. This change has significant impacts for industries with high concentrations of part-time workers, including retail, hospitality, and healthcare.

Together, these developments ensure that a broader range of workers, including freelancers and contractors, can build retirement savings.

Retirement Laws and Regulatory Changes Impacting Retirement Plans in 2026

Key Dates for 2026:

• Jan 1: Roth catch-up mandate
• Jan 1: Super catch-up indexed
• Throughout: Auto-enrollment enforcement
• Dec 31: Amendment deadlines

Retirement laws offer new and expanded opportunities for plan participants and plan sponsors. As we move into 2026, employers must stay updated on the latest regulatory changes to ensure compliance and offer the greatest benefit to their workforce. Let’s look at some of the notable laws and regulations expected to impact the retirement industry.

SECURE 2.0 Act Updates To Note for 2026

The SECURE Act incentivizes employers to offer retirement plans for employees, and SECURE 2.0 includes updates to those regulations, including:

• Tax Credits: A business that starts a new retirement plan may qualify for a tax credit of up to $5,000 for three years. An additional tax credit of $500 is available for those who include an auto-enrollment feature or convert their plans to auto-enrollment.
• Employer Contribution Tax Credit: SECURE 2.0 offers a credit of up to $1,000 per year per employee for employer contributions, applicable to businesses with 50 or fewer employees. The credit is reduced for employers with 51–100 employees.
• Required Minimum Distributions (RMDs): The age for RMDs increased from 72 to 73, effective January 1, 2023, and will increase to 75 in 2033
• New Catch-up Contribution Limits: Starting January 1, 2025, SECURE 2.0 increased catch-up contribution limits for workers aged 60 to 63. These employees can contribute the greater of $10,000 or 50% more than the regular catch-up contribution amount for that year. This limit will be adjusted for inflation to keep pace with rising costs.
• Automatic Enrollment: SECURE 2.0 also emphasizes automatic enrollment and contribution escalation to improve employee participation in retirement savings plans. As of 2025, most employers offering a retirement plan must automatically enroll eligible employees with a contribution rate between 3% and 10% of their salary. Employees may choose a different rate or opt out of participating.
• Expanded Eligibility for Long-Term Employees: Beginning January 1, 2025, long-term part-time employees with two consecutive years of service (and who are at least 21 with 500 hours of work each year) must be allowed to take part in their employer's workplace retirement plan. Previously, eligibility required three consecutive years of service.
• Student Loan Matching: The student loan matching provision of SECURE 2.0 helps employees begin saving for retirement while paying off student loans. Beginning in 2024, employers were permitted to match retirement account contributions with an employee’s student loan payment at the same rate as any other retirement account match.
• Emergency Savings: SECURE 2.0 also includes provisions for emergency savings in the form of a Pension-Linked Emergency Savings Account (PLESA). Employees may also make penalty-free emergency withdrawals up to $1,000 from their retirement account to cover personal or family emergencies.

In addition to these updates, businesses should continue monitoring regulatory guidance on other provisions of SECURE 2.0.

State-Mandated Retirement Programs

As of 2025, twenty-one states have enacted laws or have legislation in progress to mandate workplace retirement plans at the state level. States with active workplace retirement programs in place are:

• California
• Colorado
• Connecticut
• Delaware
• Illinois
• Maine
• Maryland
• Massachusetts (voluntary)
• Nevada
• New Jersey
• New York
• Oregon
• Rhode Island
• Vermont
• Virginia
• Washington (voluntary)

The following states are in the process of implementing plans:

• Hawaii: Compliance deadline is not available
• Minnesota: Compliance deadline to be a phased implementation, with the first phase expected to open on January 1, 2026
• Missouri: Voluntary program
• Washington: Program launch is July 1, 2027, but may be phased in

Employers may be able to adopt a qualified retirement plan that exempts them from participating in their state’s program.