Principal survey identifies retirement industry disruptors by 2030
Business Record Staff Mar 22, 2023 | 10:26 am
1 min read time313 wordsAll Latest News, Banking & Finance
The Principal Future of Retirement Survey identified the leading factors that will disrupt the retirement industry by 2030, including an aging workforce, Generation Z, demand for personalized investment advice and financial wellness. These factors are viewed as priorities over the next five to seven years by the more than 250 plan sponsors and 200 financial professionals who responded to the survey.
Changing workforce demographics are expected to be dominant as more of Gen Z enters the workforce, while the number of people aged 75 and older in the workforce is expected to grow 96.6% by 2030, according to a news release.
To support an aging workforce, 3 out of 4 plan sponsors and financial professionals agree participants should have the ability to make recurring withdrawals from their employer-sponsored retirement savings as they take a phased approach to retirement.
“Choosing to retire is no longer a single-step life decision. Many individuals approaching 60-65 years of age need or prefer a phased retirement, working part-time to get relief from the 40-hour work week without fear of outliving their nest eggs,” Chris Littlefield, president of retirement and income solutions at Principal, said in a prepared statement.
However, 76% of plan sponsors agreed the expectations of millennial and Gen Z investors will be the driving change in retirement markets by 2030.
The survey reflected growing expectations for individualized advice, with more than 70% of both plan sponsors and financial professionals saying that by 2030 personalized investment portfolios and managed account services will be common offerings within defined contribution plans.
A majority of respondents also agreed there will be a shift from improving the enrollment process for employees to improving the retirement process, which can include services such as advice, retirement planning and creating retirement income. Plan sponsors and financial professionals widely expect financial wellness to be a way participants can further customize their retirement plans.