Not a week goes by, it seems, when a research outfit doesn't release a new report attesting to Americans (most especially baby boomers') lack of preparedness for retirement. Myriad reasons are offered for the abysmal state of planning, among them the slow economic recovery, wages that fail to keep pace with the rising cost of living and a culture that prizes spending over savings.
A growing number of experts also are assigning blame to the substandard retirement and investment planning that Americans are receiving through their employers. Paltry 401(k) fund options, high asset management fees, inadequate plan oversight and the limited availability of employer-sponsored financial planning services are, say critics, major contributing factors to the retirement planning shortfall.
Market-watchers also say that investment options offered to plan participants often are too limiting. The menu of choices available — a mix of equity funds, fixed income funds and money market funds — may not provide a sufficiently broad array of non-correlating assets to sustain investment growth objectives while also insulating plan participants from market volatility.
Credit for the limited selection is due the mutual fund companies, which critics say maintain a “stranglehold” on the fund options offered participants in 401(k)s and other profit-sharing plans. In recent years, many of these plans have migrated to “target date” or “life cycle” funds that automatically reapportion employees’ plan portfolios to progressively more conservative allocations as they approach retirement age.
While the Retirement Readiness program complements ING's 401(k) plan administration services, other life insurers are adding financial planning to other group insurance offerings they market to employers, such as disability income, life, auto, home, critical illness, vision and dental insurance.
Among the companies piggybacking retirement planning to their group offerings is MetLife. The program includes a four-part seminar series, each two-hour session of which covers components of planning: retirement goals and objectives; creating and protecting wealth; asset accumulation and income distribution vehicles; and in the final session, a discussion of current employee benefits, including the company retirement plan, plus government programs like Social Security and Medicare.