As we approach the year 2024, it's crucial for employers and plan sponsors to stay updated with emerging retirement trends. By acknowledging and adapting to the emerging retirement trends, employers ensure their plans not only meet the needs of their employees but also remain competitive in attracting and retaining top talent. In this blog post, we will provide insights into the retirement trends plan sponsors need to be aware of in 2024.
Key Retirement Trends for 2024:
1. Increased Focus on Supporting Gen Z and Millennials
According to PlanSponsor, Gen Z and Millennials are expected to seek more employer support for retirement savings in 2024. These younger generations are starting to prioritize retirement planning earlier in their careers and are seeking guidance from their employers. This is supported by a survey that found Gen Z (69%) and Millennials (65%) are more likely than Gen X (48%) and Baby Boomers (34%) to use digital tools to help them understand their 2024 spending and savings. To address this trend, plan sponsors should consider offering educational resources, personalized financial advice, and tools that cater to the unique needs and preferences of these generations.
2. Regulatory and Policy Changes
Legislation before the 2024 general election is unlikely, but Social Security concerns, tax reforms, and expanding coverage for different groups of workers will be key topics, according to 401kSpecialist. Plan sponsors should consult experts to navigate potential changes and ensure compliance. By staying proactive, plan sponsors adapt retirement plans to meet employee needs and provide valuable benefits.
3. Shifting Financial Behaviors
According to NAPA-Net, in 2024, Americans are likely to take more financial actions that affect retirement, such as increasing contributions, reassessing investment strategies, and seeking professional financial advice. Plan sponsors should communicate the importance of these actions to their employees and provide the necessary resources to support informed decision-making.
In a 2024 market outlook research report conducted by T. Rowe Price, personalization was found to be a key theme for the upcoming year with the report noting “targeted experiences can drive behavioral change and improve retirement outcomes.” Digging deeper into the data shows tailored and targeted experiences were essential to driving behavioral change and improving an investor's chance of sticking to their plan. Thus, going forward, plan sponsors should be aware that a one-size-fits all approach to retirement planning may not be the best approach in 2024.
5. Technological Advancements
As an addition to retirement trend #4, T. Rowe Price notes that advancements in technology will play a large role in promoting personalization in 2024. Data analysis, online digital tools, and integrated experiences will be key to engaging diverse audiences; thus, plan sponsors would be wise to adopt these retirement innovations.
Recommendations for Employers and Plan Sponsors
Plan sponsors can use retirement trends to inform the changes they want to make to a plan.
Based on these retirement trends, here are recommendations for employers and plan sponsors to adapt their retirement plans for 2024:
Enhance employer support: Develop comprehensive retirement benefits packages that include employer matching contributions, financial education programs, and personalized retirement planning tools to engage employees and support their long-term financial goals.
Regular plan reviews: Conduct regular reviews of retirement plans to ensure they align with changing regulations, investment performance, and employee demographics.
Communicate effectively: Proactively communicate with employees about retirement plan changes, regulatory updates, and the importance of retirement savings.
Tailoring is key: Promote an environment where plan participants engage in customized experiences that meet their specific needs.
Incorporate technology solutions: Implementing digital platforms and tools significantly enhances the retirement planning experience for participants, and using data analytics helps Plan Sponsors identify trends, uncover participant needs, and make data-driven decisions.
Ring in 2024 with RPCSI
Adapting retirement plans to align with emerging trends is crucial for employers and Plan Sponsors in 2024. By embracing these trends and adjusting accordingly, employers ensure their retirement plans remain competitive and effectively support their employees in achieving their retirement goals. Stay informed, be proactive, and prioritize the future financial well-being of your employees.
Remember, retirement planning is a continuous journey, and regularly reassessing and fine-tuning retirement plans is essential to keep them relevant and impactful. Reach out today and let RPCSI be your trusted partner in navigating the retirement landscape, providing comprehensive, timely, and high-quality administrative and technical services for your retirement plan needs. Together, we can build a solid foundation for your retirement plan needs.