The Future of Retirement Planning: Trends and Innovations to Watch

Author: Siân Killingsworth / 20 Jun 2023 / 401(k) Plan Information, Personal Finance, Retirement Trends & News, Ubiquity Insights

Retirement planning has been evolving over the years. In the past, retirement planning was primarily about saving money in a 401(k) or IRA. However, with the emergence of technology and the changing demographics of the workforce, retirement planning is taking on a new form. In this article, we will explore the trends and innovations that are shaping the future of retirement planning.

Importance of Retirement Planning

Regardless of whether you’re a small business owner, a freelancer, or an employee, planning for retirement is crucial. It ensures that you have enough money to cover your living expenses and healthcare costs in the future. Retirement planning allows you to live the lifestyle you desire and pursue your passions without worrying about financial constraints.

The Future of Retirement Planning

As we look ahead, we can expect to see more innovation and personalization in retirement planning. Here are some trends that are shaping the future:

1. Personalized Retirement Plans: Traditional retirement plans often take a one-size-fits-all approach. However, the future of retirement planning lies in personalized plans. These plans will consider individual circumstances such as age, health status, and financial goals to help individuals save and invest according to their unique needs. For small business owners, choosing the right 401(k) plan for your employees can also provide a level of personalization and support.
2. Increased Use of Technology: Technology will play a significant role in making retirement planning more accessible, efficient, and cost-effective. With the advancements in financial technology, individuals will have access to tools and platforms that enable them to monitor their retirement savings, track their expenses, and make informed investment decisions. For small business owners, working with a low-cost, flat-fee¹ provider that utilizes proprietary technology can ensure that your small business 401(k) plan is optimized for success.
3. Robo-Advisors: Robo-advisors are automated investment platforms that use algorithms to provide personalized investment advice and manage portfolios. These platforms will become more prevalent in retirement planning, offering individuals a convenient and cost-effective way to manage their investments. Robo-advisors can help individuals make informed investment decisions based on their risk tolerance, goals, and time horizon.
4. Impact Investing: As people become more conscious of the impact their investments have on society and the environment, impact investing will gain popularity. Impact investing allows individuals to align their investments with their values by investing in companies and organizations that make a positive impact on society. This trend will give retirement savers an opportunity to make a difference while growing their wealth.
5. Longevity Planning: With increasing life expectancies, longevity planning will become more important. Longevity planning involves creating a financial plan that accounts for the possibility of living a longer life. Individuals will need to consider factors such as healthcare costs, long-term care, and estate planning. Small business owners should also factor in longevity planning when designing retirement benefits for their employees, as women tend to live longer than men on average.

The future of retirement planning is marked by innovation and personalization. Technology will play a crucial role in making retirement planning more accessible and efficient.

Personalized plans, robo-advisors, impact investing, and longevity planning are some of the trends to watch. As a small business owner, staying informed about these trends will help you design effective retirement plans for yourself and your employees, ensuring a secure and prosperous future.

 

1 Decimal, Inc. charges flat fees for recordkeeping and administrative services. Third-party service providers may assess asset-based fees to customers. We advise Plan Sponsors to review all service agreements with providers, such as investment advisors, custodians, and broker-dealers, to evaluate the total cost of the plan. 

Ubiquity is not a registered investment advisor, and the information provided herein should not be considered legal or tax advice. We recommend consulting with your financial planner, attorney, and/or tax advisor for personalized advice.