Moving Target Dates | Delayed Retirement Realities

Ironwood Retirement Plan Consultants • August 8, 2025

For many American workers over 50, retirement timelines have become a moving target, with increasing numbers now planning to stay employed longer due to economic volatility, market uncertainty, and the rising cost of living. Gen Xers, now in their mid-to-late 40s, 50s, and early 60s, are increasingly anxious about their retirement readiness. With median retirement balances of a 55-year-old at $50,000 and confidence in Social Security eroding, some say they simply can’t afford to stop working.


How can plan sponsors support employees through these shifts while also managing the ripple effects?


Anticipate organizational impacts. Delayed retirement brings significant implications for employers and workers, both in terms of risks and potential rewards. For companies, wage and benefit costs can rise, succession plans may stall, and younger employees might face slower promotion paths. On the other hand, retaining experienced employees, particularly in part-time or phased-retirement roles, can help organizations preserve valuable institutional knowledge, boost mentorship potential, and add stability to teams in transition. For employees, the need for continued employment can pose challenges, especially for those with health issues. However, it can also bring greater financial stability as well as a continuing sense of purpose and contribution.


Consider “flextirement” options. More workers are looking at blending reduced hours with a phased transition out of the workforce. One survey found 80% of U.S. adults plan to work in some capacity after retirement, with 25% hoping to stay full-time beyond age 60, and 16% interested in continuing with their current employer part-time or as a consultant. Retirement can be seen as an offramp, rather than a cliff. Plan sponsors can support this shift by offering flexible arrangements that retain valuable talent while helping employees ease into retirement on their own terms.


Encourage personalized one-on-one financial planning. As confusion and anxiety about retirement grow, especially among Gen Xers uncertain about Social Security and their long-term financial stability, plan sponsors can help by making personalized, one-on-one guidance more visible and accessible. Talking through scenarios with a financial advisor can clarify trade-offs, highlight overlooked options, and give employees a better sense of control over their evolving retirement outlook.

Hitting a Moving Target
How do you hit a moving target? Anticipate movement and direction. The earlier both plan sponsors — and participants — recognize that retirement timelines are shifting, the better they can plan, prepare, and pivot. For the employee, this may mean reworking their financial plan with an advisor. And for the employer, it may involve looking for ways to continue engaging the employee through part-time work or project-based consulting in areas where their experience can create the most value, whether mentoring newer employees or leading knowledge transfer efforts.


As retirement timelines shift, sponsors have an opportunity to recalibrate their aim to keep their organizations, and their participants, on track.

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PEPs Gaining Ground, But One Size May Not Fit All

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Participant Corner: Retirement May Be Your Next Adventure

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Supreme Court Lowers Bar for ERISA Lawsuits

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Rethinking Pension Surplus Dollars: Avoiding the Termination Trap

August 27, 2025
As rising interest rates have reshaped pension funding dynamics post-COVID, many corporate defined benefit (DB) plans are now experiencing significant surpluses. According to actuarial firm Milliman, the 100 largest corporate DB plans, in aggregate, held an estimated $62 billion in excess assets as of December 2024. Under existing tax law, defined contribution (DC) plan sponsors have limited options for using these surplus funds because, as a rule, accessing the excess assets requires terminating the plan. However, two new proposals from the American Benefits Council could offer an alternative path forward. In letters sent to the chairs of the House Committee on Ways and Means and the Senate Committee on Finance, the council outlined legislative recommendations that would allow employers to repurpose pension surpluses without requiring them to terminate their DB plans. Unlocking Surplus Dollars from DB to DC Plans The first proposal would permit companies to transfer excess assets from an overfunded DB plan into a DC plan, such as a 401(k), for the benefit of current employees. This would enable sponsors to keep the pension plan intact, while still making use of the surplus to help enhance employee retirement security in other ways. Support for Active Employee Health Coverage The second proposal to the committees focuses on retiree health accounts. Under its recommendations, employers would be permitted to redirect the surplus assets in overfunded DB accounts toward funding health care benefits for their current, active employees. Both proposals are seeking to modernize the rules governing surplus DB asset use while preserving the integrity of existing defined benefit plans. They would also help prevent what some policymakers might view as a “double dip” — repurposing surplus dollars into new benefit obligations while claiming a second tax deduction. The proposed changes would limit any future deductions on amounts already receiving favorable tax treatment, mitigating potential revenue loss to the federal government. Implications for Plan Sponsors If enacted, both of these provisions would provide sponsors with greater flexibility to optimize benefit offerings without dismantling well-funded pension plans. For many companies, this could mean retaining their DB plan structure while giving them more options to address their evolving workforce needs. The proposals are in early stages and would require legislative action if they were to be enacted into law. Still, they reflect growing interest in revisiting pension policy to reflect today’s funding realities as well as workforce and plan sponsor needs. Source: https://www.americanbenefitscouncil.org/pub/?id=ed02fe69-b2ef-6632-a9f6-84a8a70349c9

Engaging the TikTok Generation on Retirement

August 18, 2025
Nearly a quarter of all Gen Z employees aren’t enrolled in a company retirement plan, according to BenefitsPro. That’s three times the rate of millennials, Gen X, and Boomers. In addition, 12% of Gen Zers don’t take advantage of any workplace benefits at all, twice the rate of other generations. Here are ways plan sponsors can help prevent their youngest workers from experiencing financial FOMO by sitting on the sidelines of their employer-sponsored retirement plan. Tailor plan design. Plan sponsors may improve engagement by offering immediate eligibility for participation and matching, automatically enrolling new hires at modest deferral rates with auto-escalation features, and linking student loan payments to employer contributions. Emergency savings features and Roth options may also resonate with this cohort, helping them manage both short- and long-term needs. Use short-form videos. Provide education about the benefits of 401(k) participation via TikTok-style videos on internal platforms or social channels. This generation may prefer fast, engaging content over longer-form articles. Highlight flexibility over distant retirement dreams. Frame contributions as a step toward financial freedom. This could mean taking career breaks or more travel experiences — not just retiring at 65. When young employees can see how retirement savings fuel a lifestyle they care about, they’re more likely to start now. Make enrollment feel like an app. Use mobile-first, intuitive interfaces for benefits enrollment. Gen Z expects user experiences to feel more like Apple or Amazon, not clunky HR portals. Reduce friction in the user digital experience. Plan sponsors should work with providers who offer enrollment options that mirror the apps Gen Z uses daily. Offer purpose-driven messaging. Emphasize how financial wellness supports independence and the ability to enjoy a greater breadth of life experiences, or lets them contribute to causes that matter to them. This generation often views money as a means to impact, not just for the purpose of accumulation. Purpose-oriented messaging is likely to resonate more with this cohort. Integrate with onboarding gamification. Build benefits participation into early-stage onboarding with milestone achievements or rewards. Gen Z may respond well to gamified processes. Badges, or tiered goals can nudge participation. Even something as simple as a “first contribution” celebration badge can provide a motivational spark. As Gen Z enters the workforce, it does so during a time of economic uncertainty, high student debt, and rising housing costs. They face delayed financial milestones and a different perception of long-term planning. Many also began their careers during the COVID-19 pandemic, shaping a worldview that values flexibility, purpose, and digital fluency, though they still appreciate human guidance. Helping Gen Z build financial resilience today and setting them up for a more secure financial future tomorrow requires the willingness to rethink how retirement planning is communicated and delivered — because the habits they form now will shape their future and the retirement landscape for decades to come.  Sources: https://fortune.com/2025/05/18/gen-z-missing-out-free-money-401k-match-company-policy-retirement-savings https://www.benefitspro.com/2025/03/03/23-of-gen-zers-arent-enrolled-in-the-company-401k-3-ways-to-engage-this-younger-generation/