Fidelity finds many higher ed employees on track for retirement, but gaps persist

A new study from Fidelity Investments suggests that while a majority of higher education employees are on a solid path toward retirement, notable disparities remain – especially among staff, younger workers, and women.

The analysis draws on data from nearly 110,000 active faculty and staff across 20 US colleges and universities, offering a rare look at retirement readiness across multiple record-keepers.

The research from Fidelity captured a multigenerational snapshot of the higher-ed workforce, with Gen X making up the largest share at 44%, followed by boomers at 25%, millennials at 31%, and Gen Z at just 1%. The average age is 50, and the typical tenure is 14 years.

Participation in defined contribution plans is robust, with 84% contributing among respondents using DC plans as their primary retirement vehicle. However, engagement drops among lower-income workers, with only 67% of those earning under $35,000 participating.

All told, the average defined contribution balance stands at $369,000, and the median is $138,000. Faculty members tended to fare better, with an average income of $168,000 and a $750,000 average balance, compared to staff, who average $93,000 in income and $240,000 in savings.

A substantial cohort of retirees over the past three years left the workforce after age 70, a trend Fidelity attributes in part to the strong sense of identity and satisfaction many faculty members derive from their roles.

“Nearly 50% of retirees in the past three years retired after age 70, with long tenures and substantial retirement savings,” the report noted

For those with at least 20 years of service, the average retirement age was 70 for staff and 73 for faculty, with faculty retirees reporting average incomes of $223,800 and balances exceeding $1.6 million.

Despite these positive indicators, gaps in retirement readiness persist. While 78% of higher education employees are on track to meet their income replacement goals, staff, younger generations, and women are less likely to achieve these benchmarks.

“Enhanced plan design and financial education are essential for improving retirement preparedness and supporting workforce stability,” the report said.

Women, who make up 56% of the workforce, save at nearly the same rate as men, but still ended up with lower average balances due to pressures from income disparities.

Read more: Gender gap remains wide when it comes to retirement savings

Turnover is also a concern, especially among younger employees, who are more likely to leave after five years in their roles. The average termination rate across generations is 18.8%, with higher churn among those under age 50 and with less tenure.

Fidelity’s findings highlight the importance of tailored strategies, including targeted plan design and financial education, to address the unique needs of different employee groups. The report suggests that auto-enrollment and increased communication may help close savings gaps, particularly for early-career workers and those with lower incomes.

For advisors working with higher education clients, the data underscores the value of ongoing engagement. Employees who interact with financial resources – whether through digital tools or live consultations – show higher participation and savings rates, according to Fidelity.