---

T. Rowe Price’s latest annual 401(k) benchmarking report suggests that when retirement savers engage with financial guidance tools, the payoff can be significant.

The global asset management firm released its annual report, Reference Point, highlighting trends in plan design and participant behavior. Among the standout findings: participants who use the financial advice, education, or digital tools available through their workplace retirement site save at rates 29% higher than those who don’t. They also accumulate average account balances that are twice as large.

Despite the apparent benefits, adoption remains limited. Just 13.8% of participants currently use these resources, according to the report, which is based on data from more than 2 million retirement plan participants served by T. Rowe Price’s recordkeeping platform.

“T. Rowe Price continually evaluates industry and participant trends to anticipate future needs in a rapidly changing financial landscape,” said Francisco Negrón, head of Retirement Plan Services at T. Rowe Price. “This year’s data shines a light on how personalized guidance and advice are pivotal for retirement readiness. As the economic environment continues to challenge retirement savers, equipping them with financial tools and support is more important than ever.”

---

Roth momentum builds

The report also found continued growth in Roth contributions, particularly in plans that offer a Roth employer match. Plans with a Roth match see participation rates that are 30% higher than those without one. In those plans, Roth balances are 29% higher, and Roth savings rates are 6% higher.

Younger participants are especially likely to take advantage of Roth options, reinforcing the idea that tax diversification is becoming more central to retirement planning.

Workers in their 50s and 60s are stepping up their savings efforts as retirement approaches. Participants in that age range increase their savings rates by an average of 1.4 percentage points annually — a pace that exceeds typical automatic escalation defaults. 

They are also more likely to make active investment changes instead of sticking with default plan options.

However, the data show that catch-up contributions are disproportionately used by those who are already financially ahead. Fewer than 2% of participants with below-average retirement savings make catch-up contributions, compared with 15% of participants who already have above-average balances.

---

SECURE 2.0 and emergency features gain traction

Once you enter retirement, your portfolio must do something new: replace a paycheck. That changes how success is measured. Instead of annual returns, the focus shifts to cash flow — how consistently your investments can provide income without forcing you to sell assets at the wrong time.

This often leads retirees to emphasize dividend-paying stocks, bonds, bond funds, and other income-producing investments. Some also choose to set aside a “cash buffer,” holding one to three years of expected expenses in cash or short-term investments. This cushion can help cover spending needs during market downturns, allowing the rest of the portfolio time to recover.

---

Risk becomes personal, not theoretical

Adoption of provisions under the SECURE 2.0 Act is accelerating. Seventy-eight percent of plans have implemented at least one optional provision, with higher catch-up limits, self-certified hardship withdrawals, and small-balance automatic distributions among the most common.

Emergency savings features also appear to boost engagement. Plans that offer emergency expense withdrawals have a 76% participation rate, compared with 67% for plans without those features.

Meanwhile, plan design continues to play a pivotal role in participant outcomes. In plans with automatic enrollment, 99% of participants either maintain or increase their default savings rate, underscoring the long-term influence of default settings.