The Real Problem with Retirement Planning

The Real Problem with Retirement Planning

Some people claim the U.S. Department of Labor (DOL) conflict of interest rule is ruining the retirement industry. But, have you ever thought that maybe the industry is ruining retirement?

According to a 2015 article from U.S. News and World Report, Americans aren’t saving enough. Here are the average retirement account balances at the end of each age bracket: 

20s – $12,537
30s – $33,784
40s – $68,683
50s – $122,957
60s – $212,812

While the DOL implementation and other market shifts certainly affect retirement trends, at the end of the day, Americans simply aren’t prepared for retirement. Imagine having $212,000 set aside for retirement with no further chance to earn income. And, it must last you the rest of your life. 

In reality, the retirement industry may have created this problem. For the past two decades, I’ve been told to focus on building a renewable income stream for myself. But, in order to do that in a productive business model, most planners must move up market and set minimum asset levels to engage new clients. The problem is millions of Americans have failed to work with a financial professional early in their career to develop a well-allocated, systematic savings plan. Now, they are suffering the consequences.  

The DOL is attempting to level the playing field, but collateral effects include commoditization of our business. How can you make your business stand out from the rest and make a difference in your clients’ lives before the industry continues to make the same mistakes?


Strategies for Improvement

  • Evaluate your business model and target markets in light of the DOL rulings to ensure excellence in products and services
  • Focus on serving the middle class through education and strategy, as this population is ill-prepared for retirement, both financially and emotionally
  • Initiate income planning conversations with Americans of all ages whenever the opportunity arises
  • Utilize effective tools that provide relief for past years of ignoring the problem  


Winning Strategy

Seize the opportunity to support the underserved middle class in America. Moreover, discover market niches that boost productivity for you and your business as you navigate the post-DOL world.


About the Author

Mike McGlothlin is the Executive Vice President of Annuities at Ash Brokerage. His strength is helping advisors become more efficient and effective in their businesses. He and his team provide income-planning solutions focused on longevity and tax efficiency, and they also assist advisors with entering defined-benefit termination planning and structured settlement markets.