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Last week the Employee Benefit Research Institute, announced results from their research on the retirement savings gap and the results are staggering. According to their analysis, the aggregate national savings deficit is about 4.13 trillion for U.S. households ages 25 – 64. Clearly, America Saves Week couldn’t come at a more appropriate time!
The “Week” started in 2007 and promotes assessing and setting savings goals, such as retirement, home ownership and education. While it’s important to look at – and learn from – the current state of savings in the U.S., it’s vital that we prepare for what is to come. A recent article from NAPA Net the Magazine offers a compelling look into the future.
The author, Fred Barstein, examines how technology is going to change the retirement industry. As nearly every aspect of our lives has been impacted by advances in technology (e.g., cell phones, Internet, etc.) it only makes sense that the 401(k) industry is finally catching up. According to Barstein, while technology can’t “fix” the retirement crisis, it will pave the road to more streamlined plan management and improved participant outcomes.
For advisors, the article describes a future where cross selling and pursuing investment opportunities with plan participants will become increasingly important. Additionally, the article foresees a greater demand for fiduciary outsourcing and an increased need for 3(38) services, especially considering the amount of time advisors will need to focus on ancillary business rather than plan management. Looking into Barstein’s crystal ball, 401(k) strategies of the past will be replaced by more diverse solutions that are ruled by data.