"There are a range of investment solutions available that can work at scale to help provide levels of personalization," Fisher said. "Target date funds are what most people are familiar with, and they automatically adjust the risk tolerance for employees as they get older. A managed account service is the second most common to personalize investment strategies and is usually best leveraged once employees accumulate wealth or get within 15-20 years of retirement. The benefit of a managed account over other retirement investment solutions is it can be a force multiplier for better outcomes when individuals further refine the strategy by inputting additional financial and goal-based information."

Fisher said personalized and tailored experiences are essential to helping workers balance debt management, saving and investing for the future. According to Principal's research, 8 in 10 employees feel uncomfortable making financial decisions and 54% do not know when to engage a financial professional.

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"Having a list of challenges and not knowing how, when or where to seek help can quickly get workers off-track – potentially derailing their financial futures," Fisher said. "This is making the need for holistic financial advice and increased support solutions more paramount than ever before. We've seen the impact these solutions can have as workers' investing confidence increases from 35% to 65% with advice."

To make personalization succeed, Fisher said it is important to recognize that employees have unique needs and that their financial situations will evolve over time. Sometimes, they will need "point-in-time advice" to make decisions with confidence.

"When evaluating plan design, personalization should include a broad array of education, tools, communication, and advice to support and serve employees based on their diverse relationships to money and levels of financial confidence," Fisher said. "Additionally, we believe focusing on behavioral and educational change can also enable insights, support, and tools to help employees effectively save and plan for retirement."

On the positive side, 56% of employee respondents in Principal's survey said they set long-term goals and strive to achieve them and another 30% said they "somewhat" do that. Meanwhile, 58% of employees said they are confident that they have done a good job making long-term financial plans, while just 21% said they had not.

Looking ahead, though, Fisher said the future will only grow more complex and be marked with changing expectations and increased demand for personalized investment strategies.

"While many employers continue to look for the "silver bullet" that will meet the needs of all employees, it is necessary to recognize workers' needs are varied and they are looking for more direction," Fisher said.

With that in mind, Fisher said that more than one qualified default investment alternative (QDIA) or a hybrid QDIA could be the best approach. He noted that the Principal Future of Retirement Survey found that 86% of employers and 76% of financial professionals said that a hybrid QDIA starting out as a target date fund and later transitioning into a managed account service would change the face of investment options in the future.

"Employees can benefit from the range of personalization offered by a hybrid QDIA," Fisher said. "We continue to believe target dates are a great option for individuals early in their savings journeys with plenty of time on their side. However, as individuals' careers and lives evolve, their needs and financial goals become much different. That's when a move to a managed account service that incorporates additional factors beyond just age can better enable tailored investment strategies."