Top 5 blogs of 2023: Key takeaways for financial professionals & retirement plan sponsors
December 27, 2023
Keeping plan participants focused on long-term retirement strategies to counterbalance market volatility and/or financial anxiety presents both challenges and opportunities.
To that end, knowledge helps empower people to remain confident in the financial decisions they make for their future, regardless of economic climate. The Top 5 Blogs of 2023 may have valuable information for you to review, use in your practice, and share with plan participants:
A lack of financial literacy is stressful and costly for US adults. The struggle to manage finances can take a physical and mental toll on individuals and — for the majority of employers, money-related stress can lower employee productivity.
Financial professionals and plan sponsors can help individuals navigate financial challenges by discussing everyday money topics — credit card debt, overdraft fees, etc. — to avoid pitfalls and boost financial literacy.
Understanding how to maximize Social Security benefits can be especially challenging for women as special circumstances may impede planning. Not only do women earn less Social Security than men, they also live longer, which can impact benefit payouts. There are also lesser-known claims available for divorced women and those who are widowed. Being sensitive to and addressing the unique needs of women can help best position their retirement strategy.
For many plan participants, retirement and Social Security are inextricably linked. The notion that Social Security and an annual Cost-of-Living Adjustment (COLA) can solely fund the “golden years” is popular thinking, but the fact that Social Security pays an average of just over $1,800 each month suggests otherwise. In fact, Social Security benefits represent only 30% of the income of the elderly.¹
Financial professionals and plan sponsors can help individuals understand how the strategy of combining the guaranteed income of Social Security with other assets such as defined benefit plans could lead to earlier, financially stable retirement.
H.R. 2617, the “Consolidated Appropriations Act, 2023” was enacted by President Biden on December 29, 2022. The law encompasses significant updates and new rules that apply to many organizations. It also includes SECURE 2.0 which has implications for plan sponsors and financial professionals.
While not every SECURE 2.0 provision went into immediate effect, a number of them did. Key changes to keep in mind include:
- Increase in required minimum distribution age
- New employer matching options
- De minimis incentivization for retirement plan participation/contributions
- 403(b) plans can participate in MEPs and PEPs
- Exceptions for the terminally ill
Offering ways for plan participants to improve their financial literacy may help have a meaningful impact on their overall sense of wellbeing. And that, in turn, could pay dividends in retention, attendance and productivity.
Workplace financial education programs built around saving, borrowing, and investing can encourage employees to actively participate in financial planning. In turn, they’ll be better able to face retirement with greater confidence and less financial stress.
Looking forward to 2024
Every year is instructive for financial professionals and plan sponsors, and 2023 was no different. Reviewing top takeaways is beneficial for bringing informed perspectives and solid financial strategies into 2024 and beyond. So is staying in-the-know about the latest goings on in the financial industry. Bookmark our Insights page and check back frequently.
¹SSA.gov, Social Security Fact Sheet, accessed November 13, 2023