2019 Retirement Trends
As the initiative to help workers with their financial security and retirement preparation intensifies, the Institutional Retirement Income Council (IRIC) released their predictions for what the retirement planning community should watch for in the coming year.
The IRIC, a non-profit think tank for the retirement industry, expects an increase of plan sponsors and industry stakeholders to assess retirement income solutions and strategies for their plans.
In a press release provided by the IRIC, Bob Melia Executive Director of the non-profit explains, “2018 will be a critical year as the industry looks for ways to enhance their ability to provide workers with a path to a financially secure retirement.”
The council has assumed the following trends to watch for in the coming years.
- RETIREMENT LEGISLATION
- DE-ACCUMULATION STRATEGIES
- TAX LAW AND RETIREMENT SAVINGS
- MARKET CONDITIONS AND CORRECTIONS
With the goal of giving retirees with a retirement plan more flexibility, the IRIC expects in-plan retirement income solutions to evolve more in the coming years. As we see more financial well-being programs to help promote retirement readiness, offering in-plan retirement income solutions will become a vital component for plan sponsors. New solutions are emerging quickly, influencing sponsors who do have not reconsidered the idea of an in-plan program to possibly adopt one.
Guaranteed and non-guaranteed de-accumulation products and strategies should grow this year as plan sponsors and other industry stakeholders see the positive impact this will have on overall retirement security and readiness. With the growing impact on the workforce of an aging population, the IRIC expects an increased emphasis will be placed on the distribution of plan assets.
As high-deductible plans become more popular, the IRIC believes Health Savings Accounts (HSAs) will continue to stay at the forefront of retirement security. Additionally, the security of HSAs and 401(k) plans could help reinforce open-enrollment trends, giving members better tools for deciding how to invest HSA assets while encouraging accumulation of HSA savings for retirement.
As the market continues to search for direction after more than 10 years of rising in prices, participants could potentially face difficult investment decisions in the event of a market correction. A challenging stock market and raise in interest rates could cause even well-diversified financial portfolios to decline in value. How participants react to the conditions could cause rapid spread of products offering downside protection stable value contracts, insurance products such as deferred annuities and guaranteed income benefits, alternative funds, and real asset funds.
The retirement community is getting better educated on the retirement income solutions industry, though there are still many who follow the market. However, with service providers and asset managers being more innovation, all eyes are on the industry shifts and downfalls.
If you’re looking into retirement income solutions, we encourage you to speak with financial advisors and licensed professional insurance Agents to help best determine your needs and create a plan to have those needs met.
Source: Institutional Retirement Income Council Identifies Retirement Industry Trends to Watch in 2018, Institutional Retirement Income Council, 2018