In what may feel like the occasionally thankless business of retirement plans, it can be easy to lose sight of the positives associated with these benefits. That’s why it is important to pause occasionally and remind oneself that there is quite a bit for which to be grateful. With the holidays approaching, here are a few of the things we appreciate most about the retirement industry:
1. The new Fiduciary Rule. Sure, the regulations have shaken things up a little, but the general theme of the new law, that those who give advice and recommendations to retirement plan savers should be accountable as a fiduciary for that advice, is a welcomed improvement.
2. 3(38) and 3(21) options. The ability for plan sponsors to outsource a portion of the fiduciary liability is good for all sized plans, but especially helpful to smaller employers who have the same litigation risk as large plans, but lack the resources and expertise to manage investments in-house.
3. Flexible deferred compensation plans. Between the regulations governing qualified plans and the limits placed on participants in those plans, it can be challenging for employers to use those programs as a workforce attraction and retention tool. Nonqualified plans, though, can be structured in any number of ways and built with specific groups of people in mind. That may be just the ticket for employers who need better solutions to recruit key staff.
4. Increased rates. This coming year, the maximum contribution to 401k plans will increase from $53,000 to $54,000. That’s not a lot, but for long-term wealth building, every bit counts.
5. Eight years of bull markets. Coming out of 2008, many retirement investors were pretty shaken, some of them having watched half or more of their savings evaporate overnight. Fast forward nearly a decade and most accounts have not only recovered losses, but begun growing again.
While working in retirement can be thankless, the results are not. Savings in qualified and non-qualified plans will make up more than half of the retirement income for most Americans. These factors and the efforts professionals in the industry put forth to protect and grow savings for the future can make a huge difference.