The Modern Advisor’s Guide to Retirement Planning Trends

Every year, professionals approaching retirement ask themselves, “Am I prepared enough?” The dynamic nature of retirement planning has kept financial advisors on their toes. Recent trends in life expectancy, average retirement age, and technological advancements have changed how modern advisors approach retirement planning. 

Keeping abreast of new trends in the retirement industry empowers financial planners to offer their clients the best financial advice and planning strategies. In this article, we will explore key trends in retirement planning and share how financial advisors can leverage these trends for better client service.

Understanding the Shift in Retirement Planning

To best serve clients looking to prepare financially for retirement, advisors should understand the shifts that have occurred. Demographic changes and economic factors have altered traditional retirement planning paradigms. From millennials entering their prime earning years to baby boomers reaching retirement and increases in life expectancy, financial needs have changed in recent years. 

Millennials are more likely to turn to professional financial advisors for assistance managing their finances. While Gen Z’s most trusted source of financial advice is “finfluencers,” 59% of millennials have used financial advisors to seek advice. 

The wave of baby boomers retiring in recent years and the increase in American life expectancy to 77.5 years on average have contributed to changes in retirement savings needs. With the rise in life expectancy, the average retirement age has increased to 62 in America. Since life expectancy has continually increased, so has the average retirement age. People cannot afford to stop working as early as in years past and must prepare for future healthcare needs in old age. 

Asset-Map for Retirement Planning 

Asset-Map helps financial providers adapt to these shifts in retirement planning by providing tools to help visualize long-term planning scenarios. 

Asset-Map’s capabilities make retirement planning conversations more impactful so clients can get the professional guidance and peace of mind they seek. In addition to identifying if a client is on track for retirement, Asset-Map fosters deep conversation around the client’s retirement goals, how to best use income sources, and how to position and utilize assets. Advisors can then help their client visually see how their choices ultimately impact their retirement financial wellness. 

Key Trends in Retirement Planning

Retirement trends are ever-evolving in the financial services industry. The future of retirement looks different than it once did in years past, and retirement security is not a given. Financial advisors must work with clients to implement savings plans to prepare future retirees.

The Rise of Technology in Retirement Planning

Modern technology, especially financial planning software, is transforming retirement planning in several ways. 

Robo-advisors have become a popular portfolio management tool for beginner investors. This technology’s capabilities to rebalance portfolios, track goals, and engage in tax-loss harvesting have driven many professionals preparing for retirement to turn to this alternative. 

Additionally, AI-driven analytics have helped financial advisors provide more tailored financial strategy recommendations. By analyzing large amounts of data, including investment preferences and spending habits, AI analytics can help create customized retirement strategies. AI and machine learning can improve investment outcomes by predicting market trends and optimizing asset allocation.  

Big data for predictive modeling has also become essential to retirement planning. Predictive models analyze historical data and financial trends to forecast future market conditions and assess risks. This allows people to proactively adjust their retirement investment strategies to anticipate economic shifts and enhance financial security. 

Asset-Map’s advanced financial planning features enhance advisor capabilities in retirement strategy formulation. With advanced visualization tools, advisors can better meet their clients' needs through more productive conversations. Approaching retirement can be overwhelming to a client with the breadth of decisions they will have to make, from procuring health insurance to where to pull income in retirement. Asset-Map helps the advisor focus the conversation so the client can understand the role of each financial instrument in their retirement, as well as to help ensure that the client is on track to meet their goals.   

Customized Retirement Solutions

In 2024, clients expect more personalized retirement planning in response to their unique needs. There is no one-size-fits-all strategy for retirement planning. Understanding unique client situations is vital to providing the best financial advisory services. You should customize planning strategies according to each client’s specific financial goals and preferences. 

Younger generations are looking for more than just auto-enrollment in employer plans to prepare for retirement. Workplace retirement plans are helpful to future retirees, but advisors should aid professionals in making informed decisions on retirement plan design.

Asset-Map enhances personalized advice by providing tailored visualizations and scenarios to illustrate a client’s financial standing and goals. With the Asset-Map Report feature, you can quickly uncover gaps in a financial plan and new opportunities for growth. 

Improving Financial Literacy and Client Engagement

Financial literacy is a key contributing factor to better financial health. A healthy financial status significantly affects a client’s overall well-being and contentment. Today, financial literacy empowers people to take control of their financial health, reduce stress, and prepare for the future. 

Advisors have the privilege of educating clients in financial literacy to better their lives and financial health. Visual tools like Asset-Map can boost client engagement and help them better understand where they are on the journey to meeting their goals. Empower your clients to make better decisions in their quest for financial freedom. 

Retirement Income Planning and Longevity Risk

One key aspect of retirement planning is creating a steady income stream throughout retirement. Individuals must prepare alternative income sources to leave the workforce effectively.

Income planning for retirement typically includes replacing 70% to 90% of a client’s annual pre-retirement income with savings and Social Security. With the shortage of Social Security retirement benefits in the US retirement system, millennials and Gen Z must be prepared to face receiving 83% or less of the full benefits. Investment portfolios, annuities, IRAs, defined contribution plans, and more contribute to lifetime income. 

This demonstrates the importance of working with clients to ensure they aren’t left unprepared for their golden years. Asset-Map’s visualization tools can help advisors and their clients see income sources, expenses, insurance coverage, future goals, and potential shortfalls to make effective plans for the future. 

Retirement as a New Chapter

Another trend in retirement planning is seeing retirement as a new chapter. There has been a growing trend of retirees starting their own small businesses or pursuing new careers. Viewing retirement as an Act II is a popular mindset among current professionals. This gives a renewed sense of joy to people who may feel left without a sense of purpose. 

Your clients may wish to start the business they always dreamed of running as a young person because now they have the capital to make it possible. Or, they may want to pursue a career in something completely outside the industry they’ve worked in for many years. Whatever the case, Asset-Map can help advisors and clients assess the financial feasibility of these ventures. 

Preparing for Regulatory Changes

Regulations that impact retirement planning are constantly changing. Keeping informed about these evolving regulations is essential to an effective retirement strategy. Financial advisors should review new updates from regulatory and governing bodies to stay abreast of any important compliance regulations. Financial advisors can then help their clients adjust their plans to position themselves well for their future retirement. 

Proactively monitoring these shifts will ensure you provide the best retirement strategies compliant with regulations and optimized for the most up-to-date guidelines.  

Asset-Map’s features help support compliance with changing regulations through up-to-date tools and features. The clear and concise visualization features create a picture that can be used to have collaborative conversations with clients about adjustments that may need to be made.

Stay Ahead of Trends with Asset-Map

From the rise of technology and a call for more customized retirement solutions to improving financial literacy and engagement for better income planning, retirement planning trends are continuously evolving. Integrating innovative strategies into your retirement planning services is a must-do for financial advisors. 

Leverage Asset-Map’s updated features, including the ability to run retirement scenarios and comparisons, to stay competitive in today’s financial advisory industry and offer superior client services. Our platform helps you empower your clients to better understand how they can make better decisions for retirement. As technology continues to be a key information resource for prospective clients approaching retirement, Asset-Map will continue to invest in capabilities that reinforce the value of working with a human financial advisor.

Explore Asset-Map’s tools and features today to better align with emerging trends in retirement planning.