If your direct contribution qualified plan includes shares in company stock, you’ll want to create opportunities to talk to older and/or long-term participants about tax strategies as their eligibility for distribution approaches.
Why? Because plan sponsors and advisors can play a key role in helping those employees get access to a greater proportion of those assets’ value as retirement income.
In a recent study, nearly two thirds of U.S. adults agreed that their financial planning could use some improvement, yet only a little over a third reported working with a financial professional.1 Getting employees on board and contributing to a retirement plan is already an important step toward improving their future financial security, but sponsors and financial professionals can do more to help participants better understand and anticipate their income needs in retirement.
As a financial professional, you’re well versed in the lingo and jargon of the industry. Terms like “fiduciary” or “pension risk transfer” may roll off your tongue with ease. You’ve also gained a full understanding of the importance of taking action ahead of retirement to ensure comfortable living. Those you advise or guide through defined contribution plans, however, may not be nearly as versed as you.
Perhaps a good way to set reasonable expectations for financial markets is to evaluate them in past and future phases.
