When thinking about retirement planning in 2025, it’s crucial to stay ahead of the curve in the evolving landscape of retirement. Our 2024 “Retirement Insights” series delved into several key areas, including retirement plan design and strategy, legislative and regulatory changes, and innovative retirement income solutions. Each article offers valuable perspective and actionable strategies that can help you refine and enhance your retirement business.
It is a great time to be a retirement plan advisor, in our view. Our business is robust and growing. The number of American workers we can serve is increasing.
Below are some highlights on how to leverage our insights for your success. Dive into the links below to discover how to leverage these insights to implement a robust and forward-thinking strategy for 2025.
Retirement plan design and strategy
Navigating the next normal in the retirement industry (June 2024). Focuses on customized plan design and client engagement.
- Insights into 2025 action: This article emphasizes the impact of plan design on participant outcomes, the need holistic participant engagement (budgeting, emergency savings and financial wellness), and adaptability to the changing needs of retirement plan sponsors and savers.
- Retirement plan advisers can set themselves apart by crafting a 2025 value proposition statement that addresses their approach for each of these issues.
The pecking order of 401(k) plan design: A bird’s eye view (August 2024). Emphasizes the importance of prioritizing plan design over investments.
- Insights into 2025 action: We believe plan design is a key component of workplace success, that third-party administrators (TPAs) should be consulted as needed, and the tax-deductible nature of plan expenses may be appealing to business owners.
- Plan advisors who employ a partnership approach with record-keepers, TPAs, and asset managers may have an advantage over those who take a siloed approach.
401(k) plans and wealth advisors
Maximizing 401(k) plans: How financial advisors can leverage the DOL’s target-date tips (July 2024). Tips for financial advisors on enhancing 401(k) plans using target-date fund guidelines.
- Insights into 2025 action: Given the prominent role target-date funds play in plan offerings, ensuring alignment between target-date philosophy and plan objectives is crucial.
- To ensure proper alignment, retirement plan advisors should establish a well-defined, documented selection process that enhances understanding of glide paths and investment strategies. Emphasizing thorough target-date selection and ongoing reviews can help differentiate your business from advisors with less rigorous approaches.
Unlocking the treasure chest: The growing opportunity of 401(k) plans for wealth advisors (September 2024). Highlights the potential of 401(k) plans for wealth advisors.
To estimate the asset growth potential of a $1 million 401(k) plan over the next 10 years, there are several factors to consider, including annual contributions, employer match and expected rate of return. Consider this hypothetical example.
- Insights into 2025 action: Advisors looking to grow their wealth business may benefit from growth in the 401(k) marketplace. Ongoing contributions from existing plans and new plan creation driven by the SECURE Acts of 2019 and 2022 are driving current growth. These trends have the potential to provide advisors with generations of new investors.
- Considering each plan participant as a potential future wealth client allows a wealth advisor to take a broad view when focusing on retirement plan opportunities. Simply put: Do not allow another advisor to help your business owner client with their workplace retirement plan.
Legislation and industry opportunities
Driving convergence between retirement and wealth (May 2024). Discusses new legislation and opportunities for wealth advisors and retirement specialists.
- Insights into 2025 action: With the convergence of retirement and wealth businesses, consider focusing on business owners who don’t have workplace savings plans. They may benefit from holistic financial guidance and tax credits for plan establishment.
- Wealth advisors may want to review their book of business for existing business owner clients who may be unfamiliar with new plan tax credits
In-plan retirement income solutions
What retirement plan advisors need to know about in-plan retirement income solutions (November 2024). Covers essential information for advisors on in-plan retirement income solutions.
- Insights into 2025 action: Retirement income isn’t just a passing trend—it’s a real and growing focus for in-plan solutions, addressing a universal need with lasting impact.
- Advisors can spark meaningful conversations by creating educational content that highlights the importance of personalized retirement income strategies. This includes exploring in-plan, out of plan, as well as guaranteed and non-guaranteed options.
The bottom line
As we look ahead in 2025, the evolving landscape of retirement plan design, wealth advisory opportunities, legislative advancements, and innovative retirement income solutions offer immense potential. Whether you are looking for practice management, creative customization capabilities, or diversified retirement investment solutions, your Franklin Templeton Retirement team is ready to help you succeed in 2025 and beyond.
WHAT ARE THE RISKS?
All investments involve risks, including possible loss of principal.
Principal invested is not guaranteed at any time, including at or after a fund’s retirement target date; nor is there any guarantee that the fund will provide sufficient income at or through the investor’s retirement. The investment risk of the retirement target fund changes over time as its asset allocation changes. Investments in underlying funds are subject to the same risks as, and indirectly bear the fees and expenses of, the underlying funds.
Equity securities are subject to price fluctuation and possible loss of principal. Small- and mid-cap stocks involve greater risks and volatility than large-cap stocks.
Fixed income securities involve interest rate, credit, inflation and reinvestment risks, and possible loss of principal. As interest rates rise, the value of fixed income securities falls. Low-rated, high-yield bonds are subject to greater price volatility, illiquidity and possibility of default.
International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets.
Alternative strategies may be exposed to potentially significant fluctuations in value.
Active management does not ensure gains or protect against market declines.
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