New York-based First Eagle Investment Management is trying to help retirement savers improve how they accumulate and decumulate retirement assets.

First Eagle plans to soon demo an interactive online retirement tool it’s been developing over the past six to eight months in conjunction with Boston College’s Center for Retirement Research (CRR) and Upstatement, a Boston-based development firm that focuses on branding, digital design and technology.

The tool is being released this week to First Eagle, which plans to show it to many recordkeepers and RIA aggregators, said Michael Rosenberg, head of retirement investment solutions at First Eagle. The tool, which recordkeepers and advisors can embed in their systems, aims to help make retirement more relatable and more understandable, he said. It “should help engage, motivate and give participants really clear information about their portfolio retirement window and what a future paycheck might look like,” he said.

According to Rosenberg, the tool, which First Eagle won’t be charging a fee for, puts personal data through financial calculators built by First Eagle and the Boston College team. This includes a saver’s pay history and contribution history, rates of return and products invested in. The tool will remember savers’ information and track their progress, he said. Savers will be able to access the tool through recordkeeping websites and advisors can use it to engage clients.

The more people who use the interactive tool, the more information Boston College will be able to gather, analyze and then share with recordkeepers and financial advisors, who can use it to improve their systems, he said.

First Eagle is interested in separating “the trends practitioners may think are the realities of the retirement world to what actually happens,” said Rosenberg. It’s also important to understand retirement savers who don’t work with financial advisors, he said.

Last month, CRR, with financial support from First Eagle, published an issue brief titled, “Do Individuals Know When They Should Be Saving For a Spouse?” CRR found that dual-earner households with only one saver aren’t saving enough for retirement. They’re saving just 4.9 percent of their household earnings, compared to 8.6 percent for single-earner couples and 9.3 percent for households with two savers.

First Eagle is the corporate partner on another research paper on savings to be published this month by CRR, said Rosenberg.  First Eagle and CRR also plan to collaborate on research that looks at how people spend money when they retire and how retirement savers react to financial shocks and unforeseen life events, he said.

Distribution Dilemma

First Eagle plans to focus on how to help retirees distribute their retirement assets, said Rosenberg. CRR is helping it to better understand the distribution dilemma that has been capturing growing attention.

Nearly two-thirds of the largest and mid-sized 401(k) consultants and advisors believe plan sponsors want to retain and continue to serve individual savers once they retire, up 14 percentage points from the year before, noted Rosenberg, citing data published in Pimco’s 13th Annual Defined Contribution Consulting Study.

With the decumulation/distribution phase, “there’s not yet a silver bullet,” he said, “and I’m not sure there’s going to be a silver bullet, because it’s a much more complicated track than accumulation.” Target-date funds and peer-group performance rankings can help with investment selection during the asset accumulation phase.

Savers in the distribution phase need to understand how to distribute money, where to take it from and how to allocate assets, said Rosenberg. They also need to determine how much income is coming from dividends, understand the resiliency of that income, and consider sequence of returns (what investment returns to take first) and the tax consequences of different types of distributions, he said.

“It’s time we think about distribution differently, approach it differently and perhaps even have a suite of investment products that are meant to be focused on the distribution phase,” said Rosenberg. This could include having a separate qualified default investment alternative (QDIA) for this phase.

Plan sponsors don’t need to immediately build out a full retirement tier, he said. They should first consider whether they want to give plan participants the option of staying in the plan through retirement. If the answer is yes, they must consider the plan design and investment menu. A good question to ask, he said, is whether there’s a menu option that considers distributions.

“Don’t think you have to go from where you are today to something that’s a dramatic change to your lineup,” said Rosenberg. “Make small changes to start.”