The Next Evolution Of Retirement Planning

Building confidence in your savings

by David Cruz

For decades, the retirement industry has helped millions of Americans answer one important question: How do I save for retirement? Americans have been encouraged to save early, invest consistently, and remain disciplined. Thanks in part to workplace savings plans and supportive legislation, more Americans than ever have the opportunity to build meaningful retirement savings.

Now, as more Americans approach retirement, the conversation is changing. Between 2024 and 2030, approximately 30 million Americans will reach age 65, representing one of the largest retirement waves in U.S. history. For many, retirement marks the first time in decades they will no longer receive a regular paycheck from an employer. Instead, they’ll need to rely on the savings they’ve worked so hard to build. As a result, the new question is increasingly becoming: How can my savings support the retirement I want to live?

The Shifting Conversation: From Assets To Income

For many defined contribution (DC) plan participants, retirement planning has traditionally been measured by account balances, investment returns, and projected portfolio values. While each of these remains important, income planning is a new factor in the equation. Today’s workplace retirement plans increasingly allow participants to think about their DC plan not only as a savings vehicle, but also as a potential source of retirement income. Alongside Social Security, personal savings, IRAs, and any defined benefit plans one may have, workplace retirement plans can play an important role in creating a more holistic retirement income strategy.

This is all good news, especially since retirement income is a growing concern among Americans. According to the Alliance for Lifetime Income, 46% of Americans ages 45 to 75 say spending their retirement savings causes them anxiety. And nearly 60% say they would feel more comfortable receiving $10,000 in guaranteed annual lifetime income versus an additional $140,000 in savings, even though the two represent equivalent economic value. Researchers also have found that retirees are significantly more willing to spend during retirement if they know their money will last.

Together, these findings suggest that what people want most in retirement isn’t a larger account balance alone. They want confidence. And confidence comes from understanding what their savings can support.

When people know that a portion of their retirement savings can provide dependable income throughout retirement, they are often more comfortable spending the money they’ve worked so hard to build. That confidence gives them more freedom to make choices based on the retirement they want to live, rather than the fear of running out of money. Instead of worrying about whether every investment decision today might affect their lifestyle years from now, they can spend more time focusing on living the retirement they envisioned.

That’s where the conversation is changing. Retirement planning is no longer only about helping people save and invest. It’s increasingly about helping them understand how those savings can support retirement income and how different sources of income can work together to create long-term financial confidence.

A thoughtful retirement income strategy recognizes that different retirement assets can play different roles. Some assets may be dedicated to creating dependable lifetime income and establishing a foundation of retirement security. Rather than asking every retirement dollar to do the same job, retirees can allocate different portions of their savings to different objectives. The right balance will differ from person to person, but diversification can be just as valuable in retirement as it is during the years spent saving.

The opportunity today is to help retirees feel confident using the savings they’ve worked so hard to build. Ultimately, retirement success isn’t measured only by what people accumulate. It’s measured by how confidently they can use those savings to support the lives they want to live.

Innovation In Workplace Retirement Plans

As they have for more than 40 years, workplace plans have an important role to play. Over the past two decades, there have been significant and positive advancements that have made them more effective for workers. This has included auto-enrollment, auto-escalation, diversified investment options, target-date funds, and other participant-focused innovations. There’s also been significant expansion in availability. Each of these innovations has made workplace retirement plans more effective at helping Americans prepare for retirement.

Today, retirement income represents the next stage of that evolution.

Collective Investment Trusts (CITs) have been an important part of that evolution. Over time, they have become a preferred investment vehicle for many employer-sponsored retirement plans because of their flexibility, efficiency, and ability to meet the evolving needs of plan sponsors and participants. Today, it’s not just the investment vehicle that’s evolving, it’s the solutions within it.

As retirement planning increasingly shifts from helping participants accumulate assets to helping them use those assets effectively, CITs are becoming one way retirement income can be incorporated into workplace plans. For plan sponsors, that means building on an investment structure they already know and trust while expanding how the plan can support participants through retirement.

Just as target-date funds helped millions of Americans think differently about investing during accumulation, the continued evolution of retirement income solutions delivered through familiar workplace structures has the potential to help participants think differently about retirement itself, shifting the conversation from simply building account balances to understanding how those savings can support future income.

All Of Us Can Help Americans Retire With Confidence

What makes this moment in time especially exciting is that the retirement ecosystem is evolving in a way that requires support and participation from multiple areas of our industry. Employers, advisors, asset managers, insurers, recordkeepers, and policymakers each have a role to play in helping people prepare for retirement.

In particular, as workplace plans continue to incorporate new retirement income capabilities, advisors across the institutional and retail landscape are uniquely positioned to help employers evaluate these solutions and educate individuals on how they might fit within a broader financial plan. As innovation continues, the opportunity for advisors is not simply to offer more solutions, but to help employers and individuals make informed decisions that improve long-term retirement outcomes.

Success in the years ahead won’t be measured by how much participants save, but by how confidently they can use those savings to support the lives they want to live in retirement. There isn’t a one-size-fits-all solution because there isn’t one definition of a successful retirement. Our job as an industry is to provide the tools, guidance, and flexibility so that every individual can build a retirement strategy that reflects what matters most to them.