A major retirement issue is looming in the United States. The widespread transition from defined benefit (DB) pension plans to defined contribution (DC) plans over the last 20 years has largely shifted responsibility for financing retirement from employers to employees or plan participants.

Participants have also been hit with increased market volatility, higher than normal inflation, potentially lower investment returns, (thankfully) longer life expectancies, and a vortex of competing financial priorities. That is a challenging mix.

As a result, most people are not saving enough of their earnings to provide even half of their pre-retirement income once they leave the workforce, as confirmed in our annual Goldman Sachs Retirement Savings & Insights Report for 2022.

Financial professionals must help our fellow Americans grow and protect their savings, offering easily understood advice and guidance to help them retire more safely. More personalized support is needed, delivered in a scalable way through technology. Instead of “set it and forget it,” investors must have the ability to “set it and adjust it” when markets and personal circumstances require.

Many find adequately saving for retirement difficult in the face of the financial vortex. This refers to the competing financial priorities and life events all individuals can face, often urgently. These include paying down loans, saving for college, supporting other family members, and dealing with unexpected financial hardships such as unemployment, disasters and emergencies.

Surveys show that too many investors have not saved enough in 401(k) plans or IRAs to sufficiently fund good retirements, even in the wake of a historic 12-year bull market for equities.

In our annual Goldman Sachs Retirement Savings & Insights Report for 2022, we surveyed 1,566 individuals and found 51% of retirees reported that their current income is less than 50% of their pre-retirement income. Only 25% had more than 70% of pre-retirement income in retirement; 70% is often cited as the benchmark retirees need to maintain their standard of living.

A surprising 56% of retirees retired earlier than expected. This often was caused by factors outside their control, such as health reasons or having to care for an elderly family member. Unfortunately, the runway for retirement saving may prove shorter than some workers expect.

Our survey had a cross-section of age groups, so we could evaluate the data on a generational basis. A majority (51%) of Gen X report they are behind in retirement savings, yet younger generations feel better prepared and more ahead of schedule. The survey shows that retirement readiness does not grow more confident, but instead can decline through working careers.

This is the new reality for retirement savers. In the past, retirees could rely on DB pension plans and Social Security to fund comfortable retirements. Generation X is the first generation largely not covered by DB pension plans, which also impacts Millennials and Gen Z. The onus is now on individuals to save for their retirements, and they can all too easily be pushed off track.

In our survey, 95% of workers indicate they want financial help: education, advice, counseling. For those in the heart of the financial vortex, this need is most acute. About one in five Gen X and Millennials said financial advice is extremely important to retirement preparation.

As an industry, we must help individuals create more personalized paths to retirement that account for these challenges. We can provide outcome- and goals-based resources to ensure investors have the right targets, utilizing the right blend of human and digital support to account for changing preferences. Helping people pivot, adjust their savings and invest in effective strategies will be critical to aiding them in successfully reaching their retirement savings goals.

What lessons does our survey imbue for employers or companies who provide their employees with DC retirement plans such as 401(k) plans, and what can they do to help employees retire well?

Not only do employees want help, but they specifically look to their employers for that help. Employer retirement programs were cited by workers as their top source of education about developing retirement plans. For employers, providing retirement planning services is not just a nice to have, it is a must have, as employees now expect that assistance from their employers.

Our survey also revealed how much stress the financial vortex imposes: 58% of workers were stressed about managing retirement savings. Gen X reported the highest stress (65%).

Many studies have documented the impact on workers from increased stress, including increased absenteeism and lower productivity. Helping employees deal with the financial vortex, lowering their stress levels and breathing easier, should be a win-win for employees and employers.

Michael Moran CFA is Senior Pension Strategist, Goldman Sachs Asset Management