When most people talk about the retirement crisis, the conversation often centers around one thing: savings shortfalls. We hear about how people simply aren’t saving enough to sustain their lifestyles after they stop working. While that’s true, there’s another equally pressing crisis flying under the radar: the Retirement Advice Gap, a shortage of accessible, high-quality retirement guidance.
With the decline of defined benefit pensions and the rise of defined contribution (DC) plans, individuals are increasingly left to manage their savings and investments. For many, this means making complex financial decisions without the skills, time, or confidence to do so. The result? Even diligent savers can end up outliving their retirement savings.
Why Retirement Is More Than Just Saving Enough
A successful retirement isn’t simply about having enough money to last until the end of your life. It’s a complex equation involving multiple interdependent decisions:
- How much to save each year
- Where to save it (taxable vs. tax-advantaged accounts)
- How to invest for growth and safety
- When to retire
- When to take Social Security
- How much to withdraw annually during retirement
Even small missteps in these areas can have an outsized impact on your long-term wealth.
According to the Morningstar Center for Retirement & Policy Studies, 45% of households are projected to outlive their retirement savings. While the main reason is lack of access to DC plans, a striking 16% of long-term savers (20+ years) are still projected to run out of funds. This clearly shows that saving alone isn’t enough; how you save and spend matters just as much.
The Rising Demand for Retirement Guidance
Savers increasingly recognize they are out of their depth. The 2025 Cerulli Report found:
- 89% of people find online savings tools from plan providers helpful
- 70% consider retirement planning advice very valuable, second only to investment management
- 63% of DC participants still don’t have a financial advisor
- The top reasons for not having an advisor:
- Belief they don’t have enough assets
- Uncertainty on how to vet an advisor
- Concerns over high fees
Interestingly, half of these individuals say they will consider an advisor only when approaching retirement. While this can help with decumulation strategies, it’s often too late to make significant course corrections.
Top Reasons for Not Having a Financial Advisor
Impact of Early Advice on Retirement Savings
The Plan Sponsor’s Unique Opportunity
One overlooked solution to the advice gap lies with plan sponsors, employers who offer retirement plans. Cerulli reports that 86% of workers view their employer as a trustworthy source of financial information.
This trust creates an opportunity for employers to introduce accessible, pre-vetted advisory solutions like managed accounts at the plan level.
How Managed Accounts Bridge the Advice Gap
Managed accounts go beyond simple investment allocation; they provide personalized, dynamic retirement planning advice.
Key Benefits of Managed Accounts
Personalized Strategy: Based on both recordkeeper data (salary, savings rate, location) and participant input (outside assets, goals, spousal details).
Full Retirement Journey Support: From early-career saving strategies to late-career questions like:
- When can I realistically retire?
- When should I claim Social Security?
- How should I structure withdrawals?
Dynamic Adjustments: Unlike static advice, managed accounts adapt to life changes, market conditions, and evolving goals.
No Asset Minimums: Unlike many private advisors, managed accounts are accessible to all participants.
Cost-Effective: Fees scale with account size, making them affordable for smaller savers.
By offering these services, employers can give participants the confidence to make informed decisions, potentially reducing the number of retirees who run out of money.
Why Timing Matters: Don’t Wait Until Retirement
The compounding effect of early advice cannot be overstated. A participant in their 30s who optimizes their savings rate, asset allocation, and tax strategy today can see significantly better outcomes than someone who waits until their 60s to seek advice.
Early and mid-career decisions like increasing contributions after a raise or selecting a diversified investment mix can create thousands of extra dollars in retirement income.
Beyond Retirement: The Sandwich Generation’s Struggle
Retirement planning is getting even more complicated for the 29% of Americans in the sandwich generation those caring for both children and aging parents.
Key findings from the University of Phoenix 2025 Career Optimism Special Report:
- 51% of sandwich generation mothers have left jobs due to caregiving responsibilities.
- 52% of their income goes toward caregiving costs.
- Many underestimate long-term care costs, with 60% underestimating the $111,000 annual average by more than half.
- This caregiving responsibility often reduces income, increases stress, and delays retirement savings, further highlighting the need for personalized advice.
Practical Steps to Address the Advice Gap
Whether you’re an individual saver or a plan sponsor, here are actionable strategies:
For Individuals
- Start Early: Even small contributions matter. Use our Savings Calculator to see how much your money can grow.
- Use Available Tools: Take advantage of your plan’s calculators and educational resources.
- Seek Guidance: If an advisor feels out of reach, look into managed accounts or robo-advisors.
For Employers
- Offer Managed Accounts: Provide accessible, personalized retirement planning services.
- Promote Financial Wellness: Host webinars, workshops, and Q&A sessions.
- Address All Stages: Support participants from their first day on the job through post-retirement.
The Bottom Line
The retirement crisis isn’t just about not saving enough; it’s about not getting the right advice soon enough. With half of households at risk of running out of money, the need for accessible, high-quality retirement guidance has never been greater.
The retirement crisis isn’t just about not saving enough; it’s about not getting the right advice soon enough. Plan sponsors can bridge this gap, and individuals should leverage every resource available.
If you want to make smarter financial decisions today, explore our Retirement Planning Help hub. And if you’re balancing retirement with other goals, our Budgeting Tools & Guides can help you stay on track.
FAQs
What is the biggest mistake people make when planning for retirement?
The biggest mistake is focusing solely on the savings amount without planning how to withdraw and manage those funds during retirement. Both saving and spending strategies are essential.
Are managed accounts the same as working with a financial advisor?
Not exactly. Managed accounts provide professional, personalized advice often at lower cost and without asset minimums, but may not offer the same depth of service as a dedicated financial advisor.
When should I start getting retirement advice?
Ideally, in your 20s or 30s. The earlier you start, the more you can benefit from compounding and strategic adjustments.
How can employers encourage employees to use managed accounts?
By integrating them into the retirement plan, covering part of the cost, and actively promoting their benefits through workshops, emails, and one-on-one sessions.
How can caregivers in the sandwich generation still save for retirement?
Leverage employer contributions, automate savings, explore tax-advantaged accounts like HSAs, and consider part-time work arrangements to maintain retirement contributions.
