There has never been a better time to be in the business of advice, retirement and technology. I know this firsthand.

Technology has enriched my ability to connect over the pandemic with the thinkers, strategists and doers in financial services and retirement planning. And technology is revolutionizing these industries, too. In my conversations and on my WealthTech on Deck podcast, what I hear points lately to three trends:
1. “Retirement” has changed forever, spurring more creativity and better support in serving clients, participants, advisors and firms.

2. The biggest threat to retirement incomes today is taxes. Minimizing taxes and generating tax alpha is job No. 1.

3. Firms are investing heavily in comprehensive advice platforms that are becoming better coordinated and personalized. The goals: greater practice efficiency, consistency of advice and improved financial results for all.

1. Retirement Has Changed Forever
Baby boomers have a knack for breaking the rules; retirement is the latest example. We increased the retirement age—many now work into their 70s and 80s—although a record number of “early retirements” happened during the pandemic. Now, with the multiple threats of inflation, market volatility and higher taxes, many feel compelled to “unretire.”

People made lots of mistakes with these zig-zag course corrections. It reminds us of the importance of human advice in discouraging investors from being reactive.  

Younger generations have seen the best and the worst of times and are changing their financial goals. Jacque Reardon of Franklin Templeton shared in a recent episode of my podcast that workers responding to the company’s “Voice of the American Worker” study overwhelmingly said, “financial independence”—not “traditional retirement”—was their goal.

Jason Fichtner, the former No. 2 at the Social Security Administration and now chief economist at the Bipartisan Policy Center, noted that few can depend on not falling off the “wobbly three-legged stool” of that Social Security benefits, employer pensions, and personal savings that used to provide security in old age. 

Today’s retirees can’t rely on pensions and are looking at a much longer life expectancy. Many learned the hard way that day trading and do-it-yourself investing don’t work long-term.

Intelligent investors work with advisors to plan, budget, save and invest for the future. And as life expectancy grows, we need every lever at our disposal to optimize decumulation for clients when it’s time for them to retire, semi-retire, or embrace whatever “financial independence” means to them.

2. Taxes: The Enemy Of A Secure Retirement
Every leader I talk to identifies taxes as the No. 1 concern, especially when markets are challenging and inflation (“the cruelest tax”) is rampant. Taxes are the most significant drain on retiree assets.

Our habit has been to address tax issues with products—SMAs, UMAs, ETFs, direct indexing, deferred annuities, investment-only variable annuities, and more. These are all worthy products. But to produce the best outcomes, we need to guide clients in coordinating risk and tax liabilities across multiple accounts and products so they can build bigger nest eggs and have more retirement income.

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