The next frontier of retirement
To close the retirement savings gap, we must continue to innovate. Extraordinary progress has been made in the workplace-based retirement system over the last 50 years, since the Employee Retirement Income Security Act (ERISA) was passed.
Since then, autoenrollment has propelled 401(k) participation. Auto-escalation and employer matches have increased average saving to almost 12%. And target-date funds have invested workers’ savings in age-appropriate asset allocations. Below are perspectives to consider as investors build on the progress and push into the next frontier of retirement.
The next frontier of retirement plan design: 4 big ideas
What is the next frontier of plan design? Might we aim to promote financial wellness for workers not just in their current jobs but over the course of their careers? Might we design the next generation of features with an eye toward equity and even short-term needs? Vanguard has four big ideas worth exploring.
Closing the gender gap in IRA balances
While any number of factors may contribute to some women opening IRAs later and contributing less frequently than men, for those in a position to do so, some small changes may help close the gap. In the meantime, research from Vanguard shows that the gap is already narrowing among younger generations, such as Gen Z and millennials.
Job transitions slow retirement savings
Job changes often come with higher pay but a lower saving rate. Vanguard’s research shows how 401(k) plan sponsors and policy makers can help workers keep their savings momentum.
How America Saves
For more than 20 years, Vanguard has taken on the responsibility to present the latest retirement saving trends to the entire retirement industry in How America Saves, its flagship research piece that puts a spotlight on the saving behaviors of nearly 5 million Vanguard participants.
Liquidity without leakage: How to design emergency expense withdrawals from retirement plans
A new 401(k) provision may allow for short-term liquidity without sacrificing participants’ retirement outlook. Plan design is the key.
