With the new year quickly approaching, it’s a good time to think about some of the key trends to watch out for in 2025. Vanguard Head of Defined Contribution Research Jeff Clark—who is the author of the company’s popular “How America Saves” research—joins the 401(k) Specialist Podcast to talk about four 2025 retirement trends he anticipates will impact the workplace retirement plan market next year. podcast here 

Clark covers growing Roth contribution options, increases in auto enrollment, why to expect a broader focus on financial wellness, and continued momentum for in-plan lifetime income options.

t’s always important for retirement plan advisors to know the primary concerns and interests of 401(k) participants in order to be able to communicate with them effectively.

Invesco recently conducted some new research on the mindset of participants, and in this episode of the 401(k) Specialist Pod(k)ast, we talk with Greg Jenkins, Managing Director and Head of Institutional Defined Contribution at Invesco, who shares some surprising findings uncovered by the new research, and what advisors can learn from it.

Key Insights:

1. Participants’ Financial Concerns: Inflation, rising costs, and healthcare expenses are top concerns for 401(k) participants, significantly outweighing worries like job security.
2. Miscommunication on Retirement Income: Only 30% of participants recall receiving information about turning 401(k) balances into retirement income, highlighting a communication gap.
3. Target Date Fund Misunderstandings: A significant percentage of participants misuse target date funds, holding multiple TDFs or combining them with other investments for "diversification".

Invesco partnered with Ipsos to conduct an online survey of 583 defined contribution plan participants (May-July 2024). Participant respondents had following characteristics: Age 25-65 years old; Personal income $30,000+; Employed full-time for an organization for 1+ years; Employer has 1,000+ employees; Actively contributing to a defined contribution plan; Does not work in education, financial services, the federal government, or involved in the management of or decisions regarding employer’s retirement plans.

Source for all data: May 2024 online survey by Invesco and Ipsos. Invesco is not affiliated with Ipsos.

Invesco Distributors, Inc. is the US distributor for Invesco’s retail products.

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In this episode, we sit down with Pete Welsh, Managing Director of Retirement and Wealth at Inspira Financial, to explore the complexities of company mergers and their impact on retirement plans. 

Welsh sheds light on what happens when businesses with different retirement plans merge, outlining key outcomes and compliance concerns. He also provides expert guidance on plan terminations and offers insights into how companies can navigate these intricate processes while staying compliant with federal regulations.

The small to mid-size business retirement plan market is a key growth opportunity for advisors who are looking to expand their client base and provide much-needed benefit solutions to a traditionally underserved segment.

With all the new tax incentives for startup plans and state mandates to either offer a plan or have employees opted-in to a state-run auto-IRA program, the time has never been better to get smaller businesses on board with starting a plan—which can lead to additional opportunities on the wealth management side.

To learn more about the SMB market, we’re joined by Sean Jordan, Vice President of Small and Mid-Market Segments at Principal Financial Group, to discuss why advisors need be paying close attention to this segment. 

In this episode of the 401(k) Specialist Podcast, we’ll travel down the road to better participant outcomes with MFS Investment Management’s Jeri Savage, who will direct us through the key insights from the newly released 2024 MFS Global Retirement Survey. Podcast Episode Player 

Savage, Lead Retirement Strategist at Boston-based MFS, elaborates on some of the most impactful findings and explores how advisors and plan sponsors can help participants prioritize savings, improve retirement readiness, and navigate the complexities of target date funds.

Key Insights:

Target Date Fund Misunderstandings: Addressing misconceptions, especially the belief that target date funds guarantee income, will drive better participant outcomes.

Retirement Concerns: The 2024 MFS Global Retirement Survey shows that three-quarters of participants feel they need to save more to achieve better participant outcomes in retirement.

Competing Financial Priorities: Younger generations face significant financial challenges, like student loans, making it harder

Since the rapid rise in interest rates over the past few years, fixed income has come back into the spotlight. As the Federal Reserve begins cutting interest rates, retirement plan advisors might now be wondering how this shift will impact core bond and core plus bond portfolios.

To find out, we speak with Matt Brill, CFA, Head of North America Investment Grade Credit and Senior Portfolio Manager for Invesco Fixed Income. He’ll walk us through the basics of core bond and core plus bond portfolios, how the Fed’s intended “soft landing” will impact these sectors, and also highlight some of the fixed income opportunities that are most favorable for fixed income investors right now.

Key Insights

Due Diligence on Bond Funds: Fiduciaries should consider fees, performance against benchmarks, and the level of risk when assessing core and core plus bond funds. A balance between risk and stability is crucial to avoid bond portfolios behaving more like equities.

Impact of Fed Rate Cuts: The Federal Reserve's decision to cut interest rates is expected to benefit bond funds, making it easier to add bonds to portfolios and improve credit assets' performance, such as high yield and emerging markets.

Core vs. Core Plus Bonds: Core bond portfolios consist of highly liquid, lower-risk assets like treasuries, while core plus portfolios include higher-risk options, such as emerging markets and high-yield bonds, offering higher returns but also greater risk.

Not a Deposit | Not FDIC Insured | Not Guaranteed by the Bank | May Lose Value | Not Insured by any Federal Government Agency

Before investing, investors should carefully read the prospectus and carefully consider the investment objectives, risks, charges and expenses. For this and more complete information about the fund(s), investors should ask their financial professionals for a prospectus or visit invesco.com/fundprospectus

Past performance does not guarantee future results. An investment cannot be made into an index.

All data provided by Invesco unless otherwise noted.

Before investing, consider the Fund's investment objectives, risks, charges and expenses. Visit invesco.com/fundprospectus for  a prospectus/summary prospectus containing this information. Read it carefully before investing

The risks of investing in securities of foreign issuers, including emerging markets, can include fluctuations in foreign currencies, political and economic instability, and foreign taxation issues.

Active trading results in added expenses and may result in a lower return and increased tax liability.

The risks of investing in securities of foreign issuers, including emerging markets, can include fluctuations in foreign currencies, political and economic instability, and foreign taxation issues.

Junk bonds have greater risk of default or price changes due to changes in the issuer’s credit quality. Junk bond values fluctuate more than high quality bonds and can decline significantly over a short time.

As with any comparison, investors should be aware of the material differences between active and passive strategies. Unlike passive strategies, active strategies have the ability to react to market changes and the potential to outperform a stated benchmark. Other differences include, but are not limited to, expenses, management style and liquidity.  Investors should consult their financial professional before investing.

Invesco Distributors, Inc.

Considerable resources have been devoted to solving the challenge of portability in retirement savings over the past few years, and the stakes are high to get it right and cut down on costly an unnecessary retirement plan leakage.

In this episode, we talk with Ben Thomason, Head of Defined Contribution Distribution at Allianz Life Insurance Company of North America, to explore the importance of portability and the unique challenges it poses when it comes to in-plan guaranteed lifetime income solutions.

Thomason dives into the complexities of why portability matters for participants, preserving benefits, maintaining guarantees, and navigating the challenges of transferring retirement assets across plans and IRAs. He also talks about key factors advisors need to consider when assessing different in-plan guaranteed lifetime income options.

Key Insights:

Here are three concise key insights from the podcast episode:

• Technology's Role in Portability: Middleware technology is vital for maintaining seamless connectivity between record keepers and product providers, enabling easier portability of guaranteed lifetime income products and ensuring a consistent participant experience during transitions.
• Importance of Portability: Portability of retirement savings is crucial as workers frequently change jobs. In-plan guaranteed lifetime income solutions, such as annuities, need to ensure participants can transfer their benefits seamlessly without losing guarantees or facing disruptions.
• Product Design and Portability: Products designed as individual contracts offer significant advantages in portability over group contracts, as they maintain consistent benefits and guarantees when moved between plans, reducing administrative complexity and costs.

ERISA attorney Allie Itami, Partner at Lathrop GPM in Minneapolis, joins the 401(k) Specialist Pod(k)ast to talk about the status of the Department of Labor’s beleaguered fiduciary rule in light of recent stay rulings in Texas, and also chimes in on ERISA at 50 before addressing compliance challenges presented by annuities in 401(k) plans.

And click here to check out a recent blog post from Itami about ERISA’s 50th anniversary, which will be celebrated with a gala event in Washington D.C. on Sept. 12.

Itami is a partner in Lathrop GPM’s Business Transactions Group, specializing in employee benefits and is known for providing comprehensive counsel on fiduciary compliance under ERISA and the Internal Revenue Code.

Key Insights:

Annuity Challenges in 401(k) Plans: The inclusion of annuities in 401(k) plans remains challenging due to issues with fiduciary liability, stigmas associated with annuities (such as high fees and lockups), and a lack of comprehensive safe harbor protections under current regulations.

Fiduciary Rule Delays: The Department of Labor’s fiduciary rule, which was set to take effect in September 2023, has faced delays due to court rulings. Compliance on the original date is no longer a concern for service providers due to legal stays, and the likelihood of the rule being implemented soon is minimal.

ERISA’s Evolution: ERISA has adapted over its 50-year history, moving from employer-centered benefit plans like pensions to more individualized retirement options such as 401(k)s and IRAs, reflecting shifts in workplace benefits.

Morningstar Retirement President Brock Johnson joins a special 100th episode of the 401(k) Specialist Pod(k)ast to provide an inside look and share insights into the past, present and future of the comprehensive retirement planning solutions and investment research unit.

Johnson talks about how retirement solutions and research have evolved over the years, what’s behind a host of recent innovations, and provides a glimpse into the future.

Key Insights:

1. Morningstar Retirement’s Evolution and Mission: Morningstar Retirement has maintained a consistent mission since its inception, focused on empowering investor success by providing holistic advice and investment expertise, particularly in the retirement planning space. Over the years, they have expanded from offering a single product to a broad suite of services that now includes fiduciary services, custom target date offerings, and managed accounts.
2. Innovation and Future Focus: Morningstar Retirement emphasizes continuous innovation by listening to clients and expanding the definition of retirement solutions. They are focusing on offering more holistic and actionable retirement solutions, such as personalized annuity recommendations and advisor-managed accounts, to meet the evolving needs of the retirement planning industry.
3. Challenges and Industry Impact: One of the significant challenges highlighted is the lack of access to employer-sponsored retirement plans for many private sector employees. Morningstar Retirement is working to address this issue by making it easier for advisors and record keepers to manage smaller startup plans, aiming to improve access to retirement savings vehicles for a broader population.

Morningstar Investment Management LLC is a registered investment adviser and subsidiary of Morningstar, Inc. This recording is for informational purposes only and should not be considered investment advice. Opinions expressed are as of the date of recording; such opinions are subject to change without notice. The views and opinions of guests are not necessarily those of Morningstar and its affiliates. Morningstar Investment Management and its affiliates shall not be responsible for any trading decisions, damages, or other losses resulting from, or related to, the information, data, analyses or opinions or their use. Morningstar Investment Management does not guarantee the accuracy, or the completeness of the data presented herein. Firm data as of March 31, 2024. DC plan accessibility statistics available at https://press.aarp.org/2022-7-13-New-AARP-Research-Nearly-Half-Americans-Do-Not-Have-Access-to-Retirement-Plans-at-Work. Read more important disclosures here: https://www.morningstar.com/products/social-media-disclosures

The retirement landscape is undergoing a dramatic shift, characterized by unprecedented challenges such as increased longevity and unpredictable market conditions. Traditional retirement models centered solely on wealth accumulation are no longer sufficient. A more holistic approach is imperative to effectively manage risks, generate sustainable income, and ensure financial security throughout retirement.

To explain this transformation, joining us on the 401(k) Specialist Pod(k)ast are a pair of well-versed subject matter experts in Joshua Grass, CFA, Senior Strategic Accounts Associate at Allianz Life, and Todd Levy, Managing Director, RIA, with The Retirement Plan Company.

Josh and Todd share thoughts on how the landscape is changing, the new challenges emerging, how to adapt strategies that prioritize the creation of a sustainable income stream for retirees, and how to address participant concerns about retirement income planning.

Key Insights

Evolving Retirement Landscape:
Retirement planning is shifting from a primary focus on wealth accumulation to a more holistic approach emphasizing risk management and sustainable income due to increased longevity and demographic changes.

New Strategies for Retirement Income:
Industry experts highlight the importance of guaranteed lifetime income solutions, such as annuities, which provide stability and protection against market downturns, ensuring a reliable income stream throughout retirement.

Participant Concerns and Industry Response:
Many participants fear outliving their savings more than death itself. The industry is responding with services and products that offer personalized advice, inflation protection, and easy-to-understand income strategies, improving participants' financial confidence and retirement security.

Research cited in the podcast:

• Alliance for Lifetime Income, “Welcome to the Peak 65® Zone – A New Chapter in American’s Retirement Landscape,” January 2024
• Allianz Life conducted an online survey, the 2024 1Q Quarterly Market Perceptions Study, in February 2024 with a nationally representative sample of 1,005 individuals age 18+
• The Allianz 2024 Annual Retirement Study, conducted online in February and March 2024 with a nationally representative sample of 1,000 individuals age 25+ in the contiguous U.S. with an annual household income of $50k+ (single) / $75k+ (married/partnered) OR investable assets of $150k+
• U.S. Social Security Administration, Period Life Table, 2020, as used in the 2023 Trustees Report

Allianz Life Insurance Company of North America does not provide financial planning services.

Allianz Life Insurance Co