2025 Job Market Predictions: Navigating the Future of Work & Retirement

New year, new you — and new job market trends, too. Now that we’re five full years out from the beginning of the pandemic, the employment market is settling into a new configuration influenced by the “new normal” of remote work, our changing needs and lifestyles, and more. Below, we’ll dive into some expert predictions about the changing landscape of work and retirement in 2025 and beyond.

1. Expect Shifts in the Hiring Landscape

As we continue to evolve and recover from the pandemic, so too does the job market. In the wake of worldwide shutdowns, workforce needs dramatically changed — bringing lasting shifts not only to the hiring landscape, but to industries themselves.

For workers, the turbulence of pandemic life echoed into the job space. According to information gathered by the McKinsey Global Institute, between 2019 and 2022, “the U.S. labor market saw 8.6 million occupational shifts, 50 percent more than in the previous three-year period.”

Along with employees switching jobs, America also enjoyed a surge of entrepreneurship. In either case, though, the traditional 401(k) model isn’t always the most effective to safeguard retirement savings in this new climate.

Too often, workers leave old 401(k) funds behind, potentially even forgetting about them entirely — not to mention lapses in regular contributions and management. For those in new salaried positions, a 401(k) rollover can help keep all your retirement funding easily trackable in one place. Fortunately, platforms like Capitalize are making the 401(k) rollover process easier than ever before.

For self-employed individuals and small business owners, alternative options like solo 401(k) or SEP IRA may make more sense. And for any saver who earns an income (or whose spouse does), a traditional IRA provides a place to manage retirement funds regardless of your employment.

From White Collar to Blue Collar

One major predicted shift: a growth in the availability of so-called “blue-collar” roles. 

While many of us have imagined the best (or most lucrative) jobs as those that take place behind a computer screen, this shift actually presents an opportunity for many Americans. After a major hiring boom in construction and manufacturing, those trained as carpenters, electricians, welders and plumbers have an opportunity to flex their skills — and those between jobs or looking for a shift have an opportunity to take up these trades, which are often less costly to train in than traditional collegiate programs.

The good news is, 401(k) account access has been on the rise in the U.S. over the last several years, with almost six in 10 Americans having access.

However, blue-collar roles are less likely to offer access to employer-sponsored retirement plans like 401(k)s. The same is true for smaller businesses. Workers who move into roles where a 401(k) is not offered won’t be able to roll their old accounts over into a new one — but could benefit from taking their retirement savings into their own hands with a different kind of account, like an IRA.

For those in the growing community of self-employed people and small business owners, SEP IRAs can be a powerful vehicle for accelerating and maximizing retirement growth. These days, fintech companies like M1 make opening a new retirement account as simple as a few smartphone swipes.

2. Policy Anticipation Will Create Uncertainty, Employers Will Play Q1 Cautiously

No matter what side of the political spectrum one sits on, an administrative party change can create ripples across the economy and labor market — which can translate to uncertainty for both workers and employers.

While things may very well equalize later on in the year, during the first quarter of 2025, hiring and wage decisions may be made with more caution, potentially slowing the job market for those hopeful to make a transition. In any case, economists predict the unemployment rate should remain fairly stable over the next year.

A Conservative First Quarter

While companies slow down to assess the impact of the major U.S. political shift, raises may be delayed and hiring freezes could be implemented — which, in turn, could impact workers’ ability to maintain steady retirement savings contributions.

However, proposed changes to the tax code under President Trump — including corporate tax cuts — could boost companies’ abilities to support their workers, including in their retirement savings strategies. The SECURE Act, which was passed under the first Trump administration, made it easier and less expensive for small business owners to offer employer-sponsored retirement plans. As well as pushing back the date when account-holders would need to begin taking required minimum distributions (RMDs). “I would expect that general support to continue in a second administration,” said Institutional Retirement Income Council executive director Kevin Crane.

3. Trends in the Workplace: Increased Return to Office and Integration of AI

By now, most of us are probably familiar enough with AI to interact with it every day — whether it’s asking our smartphone’s assistant to set a timer or running a question by ChatGPT.

More of us than ever before, too, find ourselves without a firm boundary between our living space and our working space, thanks to pandemic-era office shutdowns.

However, 2025 will likely see changes in this trend with return-to-office mandates — as well as shifts owed to the increased adoption of artificial intelligence tools.

Return-to-Office Mandates

While some of us have found freedom and flexibility in the advent of remote work, for others — especially those whose jobs rely on collaboration — working from home can feel isolating and sequestered. In 2025, many companies are expected to implement and enforce return-to-office policies, which may help workers more easily interface and innovate with one another.

Of course, commuting costs both time and money — as does relocation, for those who ventured further afield from their companies’ headquarters during the remote work revolution. These costs could push retirement savings lower on the priority ladder for some employees — but smart retirement savings strategies can help.

“Many people underestimate the long-term impact of seemingly small fees on their retirement savings. Some estimates suggest that 401(k) plan fees could be 1% or more (source). Saving 1% could translate to $700 per year on a $70,000 401(k) balance or $1,500 on a $150,000 balance. Over the long-term, 1% fees could have a material impact on retirement savings; over 35 years, a 401(k) account balance of $25,000 with an average return of 7% will have nearly 30% less in retirement savings with a 1% fee compared to a 401(k) without the fee (source).”- Brian Barnes, CEO of M1

Increased Integration of AI

For many skilled workers, the knee-jerk reaction to the spread of AI has been fear — specifically fear that artificial intelligence tools will eliminate certain job roles currently filled by humans.

But technology has changed the way we work since the beginning of humanity, often in ways that have made our lives, on the whole, more convenient.

As AI tools are integrated into the workplace, it’s true that some human positions are likely to shift, and that those shifts may include career interruptions. But these shifts present an opportunity for workers to upskill their ways into higher-paying, and potentially less labor-intensive, roles. It’s also true that AI is playing a continuing role in the rise of fintech, which is helping many people increase their retirement savings and overall financial wellness.

4. Hiring Practices Will Evolve

In addition to the shifts above, 2025 may see companies moving beyond traditional hiring methods, with an increased focus on agility, inclusivity and specific skills.

Skills-based or skills-first hiring, specifically — which focuses on hiring for demonstrated abilities regardless of how they were cultivated — is becoming more common. This trend may increase opportunities for those who haven’t received a traditional collegiate education.

Rise of Skills-Based Hiring

A reduced reliance on collegiate degrees in the hiring process has enormous potential to save Americans money: the average college education cost hovers at more than $38,000 per student, per year. With the proliferation of online courses, vocational schools and other educational options, members of the workforce can get a leg up by reducing or eliminating their student loan burden, focusing on gaining experience and less-expensive certifications.

However, workers entering new roles without formal education may lack exposure to retirement planning resources and knowledge during the early parts of their careers — not to mention access to retirement benefits. Again, self-directed retirement options like IRAs can be a helpful tool in these cases, as can fintech tools that make getting started on retirement savings easier.

5. Economic and Employment Dynamics Will Play A Role

Along with workplace-specific trends , overall economic factors — including inflation, labor shortage, and innovation — will continue to reshape the opportunities available to workers.

Additionally, entrepreneurship and solopreneurship are on the rise, with an increasing percentage of the labor force moving out of salaried positions to work for themselves or start small businesses. (Case in point: The U.S. averaged 430,000 new business applications per month in 2024, which represents a 50 percent increase from 2019’s rate.)

Surge in Entrepreneurial Activity

While more Americans realize the dream of becoming their own boss, they must also take care to proactively plan for their own retirement — in lieu of traditional employer-sponsored benefits like 401(k)s.

While a regular IRA is a good starting point, for small business owners and self-employed individuals, SEP IRAs can dramatically increase the amount that can be contributed toward retirement savings (and be deducted from annual taxable income).

Conclusion

As we’ve seen, there are plenty of changes afoot in 2025 — and while some trends are sure to be occasionally disruptive, they all present their own unique opportunities for workers to level up their careers or explore entirely new possibilities.

Staying informed and proactive about retirement savings is key to building the infrastructure for a brighter future, regardless of job market fluctuations. Fortunately, another evolving technology — fintech — is making it easier than ever to stay ahead of the curve.

If you’re looking for an automated retirement option that puts your future in your control, M1 is a platform worth checking out. With traditional, Roth and SEP IRAs, M1 offers automated investing and commission-fee-free¹ retirement accounts that help take the guesswork out of growing your nest egg — and to keep your life simple.

You’ll choose what you invest in, how much, and how often, along with having access to more than 6,000 stocks and ETFs to customize your investment strategy. M1 also offers automated contributions and utilizes dynamic rebalancing to balance your portfolio over time without selling — keeping your goals on track. Similar to a 401(k), this allows you to set your investment strategy on auto-pilot. Fractional shares² are also available-the minimum buy order per security is $1.00.

If you have funds left in an old 401(k), rolling them over into an M1 IRA gives you the leeway to grow everything in one place  — while keeping your fees low and your effort light-touch.

After all, the whole point of saving retirement is to make your life easier, not harder. It should be that way at every point along the journey.

Footnotes