Retirement Income, Decumulation and Retirement Security have been seriously debated over the last 5 years. However the question remains – is the retirement industry any further down that path of finding a workable solution for retirement income than they were 5 years ago? Or, is the industry stuck at a crossroad?
Plan sponsors like the concept of retirement income. What’s not to like? Retirement income – generated by a portion of a defined contribution asset – would give a participant some of the comfort normally associated with a Defined Benefit plan. However, in most cases, plan sponsors choose to avoid the funding liability associated with a Defined Benefit plan.
Funding a retirement income stream from defined contribution plan assets is possible, however doing so is cumbersome. The process and set of decisions that need to be considered between a financial professional, a plan participant and possibly a healthcare professional are complex. If the buying decision also involves a spouse and/or heirs, the decisions and processes becomes even more time consuming.
Working through these complexities leaves a plan participant to appreciate the simplicity of living in the asset-accumulation phase, versus the myriad of complexities associated with the asset decumulation phase.
For more on this topic, check out Fred Barstein’s article The In-Plan Retirement Income Dilemma at www.WealthManagement.com.
At this week’s RPA Retirement Income Roundtable, and Think Tank in New York City hosted by WealthManagement.com, leaders from record-keepers, broker/dealers, aggregators and service providers gather to discuss how to meet the growing demand and overcome the obstacles.
