SunGard said it designed the Monte Carlo-based tool
to help retirement plan participants feel confident about managing their
retirement portfolios. The calculator projects pre- and post-retirement
portfolios, assets at retirement and a budget along with retirement cash flow.
“Advisers need a better way to address their clients’ concerns about retirement
savings and spending,” said Nate Call, vice president of product management in
SunGard’s wealth and retirement administration division. “SunGard’s
MyRetirement helps advisers provide a clear, realistic view of their clients’
ability to fund their retirement years and guide them toward their goals.”
Annual
IRA rollover contributions are expected to reach $451 billion in 2017,
according to research from Boston-based global analytics firm Cerulli
Associates, titled “Evolution of the Retirement Investor 2012: Understanding
401(k) Participant Dynamics, and Trends in Rollover and Retirement Income.”
Rollover
opportunities are increasing as Baby Boomers have started reaching retirement
age, said Alessandra Hobler, senior analyst at Cerulli. “Rollovers into
individual retirement plans (IRAs) from defined contribution (DC) plans were at
$315.7 billion as of year-end 2012, and we expect that number to reach $450
billion in 2017,” Hobler said.
The
report analyzes current 401(k) plan participant behavior, including insight
into the key pre-retiree demographic, and provides an in-depth perspective into
the factors affecting rollover transactions.
Some
highlights of the study are:
Assets
in 401(k) plans totaled $3.1 trillion in 2011, representing a significant
opportunity for asset managers and other providers.
In
the majority of cases, the rollover goes to an existing relationship. Providers
should be less focused on the current opportunity and try to project the
benefits of a long-term relationship.
IRA assets reached nearly $5 trillion
by the end of 2011 and rollover contributions were more than $300 billion. Both
of these totals will increase over the next five years as Baby Boomers enter
retirement.
“The
assets in employer-sponsored DC plans need to meet income needs for these
individuals,” Hobler said. “Providers need to position themselves as the best
choice for retirees who will rely on these assets alone. In many cases, a
rollover presents an opportunity for asset managers to capture additional
assets.”
The
growing opportunity in IRA rollovers should be a key component of financial
services firms’ strategies over the next five years, Cerulli believes. Engaging
plan participants has been a challenge for many years; it can be difficult to
reach rollover prospects. Providers seeking rollover assets need to target
their firm’s investor profile. One-size-fits-all messaging may result in missed
opportunities.
More
information on the report including how to purchase a copy is at Cerulli’s
website.