Happy Friday, readers! Skilled retirement plan advisers already know the next frontier of DC plan optimization is the “decumulation challenge.” Experts agree the spending phase of retirement savings is far more complicated than the accumulation effort. Fortunately, advisers can play a big role in helping plan participants make sense of how to build a sustainable retirement paycheck. As Voya Financial learned in a survey published this week, nearly all of those who work with an adviser feel they have prepared themselves well for estimating their monthly income needs in retirement.
Based on the results of a new CANNEX study, advisers who are looking to provide clients with guaranteed income should seriously consider both income annuities and savings annuity contracts that offer GLWBs.
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There have already been regulations to address DC plan sponsors’ concerns about adding retirement income products to their plan, and Angela Winingham, with MetLife, said she thinks there will be a continuation of that.
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Though retirement plans can allow individuals to self-certify that they qualify for a penalty-free coronavirus-related distribution, should the IRS discover otherwise during a future audit, a participant can be subject to substantial penalties.