Here's a thought-provoking stat for you: There’s roughly a four trillion-dollar gap between what people have saved for retirement, and what they're actually going to need. This comes to us from the Employee Benefits Researchers Institute.
So how can we work together to close that gap? We think there are two, key areas to focus on: retirement plan access, and adequacy of savings.
It starts with getting more people access to retirement plans. Today only 67% of private industry workers have access to a defined contribution plan. For those people in plans, adequacy is about helping ensure they have what they need to succeed.
There are several things that leading financial professionals are doing today that are helping to solve for this gap. Let me focus on six of them.
First, focus on competitive price points in the small plan market. Most of the coverage gap exists in the world of small-.
Second, focus on eligibility requirements.
Third, revisit plan design: help plan sponsors limit pre-retirement withdrawals and loans; establish more appropriate default rates; and broader use of auto escalation.
Fourth, be more strategic and much more targeted on communications. Different messages resonate with different audiences
Fifth, revisit default investment offerings to ensure that they meet the needs of the plan and its demographics.
And sixth, increase access to integrated financial wellness programs and tools.
These are just a few of the ways that financial professionals can make a difference with respect to increasing access and adequacy. For more specifics, and for other retirement insights, be sure to check out our 2022 Retirement Market Outlook.
Thanks, and have a great day.
- The retirement savings gap is approaching an estimated $4 trillion. There are two keys that many leading financial professionals are focusing on in order to close that gap.
- Senior Retirement Strategist Michal Doshier provides tips for expanding retirement plan access to help financial professionals make access to plans easier and more widespread.
- He also provides insight into improving retirement plan adequacy so that, once in plan, participants are better-equipped to generate and maintain the savings they need for a long retirement.
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