Defined contribution plans have evolved, but the industry still isn’t fully aligned with how today’s workforce approaches retirement. As employees live longer and seek more flexibility, demand for phased retirement is growing—allowing workers to gradually transition instead of stopping abruptly.
Plan sponsors are beginning to take notice. Increasingly, they view retirement benefits as a key tool for recruiting and retaining talent and are pushing for more than just basic plan offerings. This includes broader financial education, better tools, and support that extends beyond high earners.
At the same time, challenges like a mobile workforce, account leakage, and rising costs continue to pressure the system. Despite its growth, the defined contribution model still functions more as a savings vehicle than a true retirement solution.
As expectations shift, plan sponsors are playing a larger role in driving change—pushing providers and advisors to adapt, with phased retirement emerging as a key area of focus.
Read more insights in Fred Barstein’s latest WealthManagement.com article, “How the 401(k) Industry Needs to Adjust to Phased Retirement.”
