Retirement Decumulation? Trends for 2022


Save for a healthy and secure older age. That’s why 401k plans exist, right? What’s never been as clear, is the answer to “then what?” How do we responsibly use retirement funds to meet our later life needs, especially since we are living longer? Experts anticipate that more products and services addressing this challenge will hit the market in the year ahead. Here are suggestions for assessing the possibilities.


Rocket Science?

Even experts admit that it’s not easy to figure out how to spend down savings. Since the retirement industry has been focused on increasing saving, not as much attention has been given to effective solutions for addressing the challenge of spending down during retirement. Now, with the population of older people rising, and government-mandated income illustrations anticipated to create more awareness, options for leveraging retirement savings are becoming more available. What options are worth consideration—and what questions need to be asked in assessing them? 401k Specialist Magazine shares perspectives from Vinithat Kaushik of BlackRock Retirement Solutions:


The problem is three-fold. Number one, nobody can predict how long theyll live so knowing exactly how long an individual will need to make their savings last is an impossible task. Number two, retirees are more susceptible to market volatility since theyre drawing down savings to meet their income needs rather than relying on a paycheck from an employer. Number three, they dont know what their income needs throughout retirement will be, exactly.  Were asking regular individuals to solve a problem that many of the most sophisticated investors cannot.


Many companies are coming to market with a retirement income solution. You cant turn one way or the other and not see something branded as retirement income. We offer three considerations that should be the underpinning of anything done in this space, and theyre all tied to spending in retirement.

  • Does this investment maximize the amount of retirement income I may be able to generate?
  • Does it help me spend as consistently as possible over time, recognizing that I likely have essential expenses to meet? I need a floor for my spending, and then maybe it goes up and down around that for discretionary spending.
  • Does it provide income for the rest of my life? Longevity risk is a real risk that people face.


Planning for 2022?

It’s looking like 2022 will continue to be full of challenges and changes for plan sponsors to manage. Hit the ground running by getting the basics checked off your list. Here’s an easy one: it remains a Department of Labor (DOL) requirement for your retirement plan to have a current ERISA Bond—and this must be issued from a U.S. Treasury listed business, such as Colonial Surety Company.  As a national leader in the field, Colonial can help you with the required ERISA Bond for the plan —and much more. We offer affordable fiduciary and cyber liability insurance to protect plan sponsors. Colonial makes it easy, fast, and direct to quote and purchase your coverage package online, from anywhere.

Choose Your Affordable Package Here Now.


Keep The Information Flowing

In planning for 2022, remember that the Department of Labor now requires income illustrations to help participants better understand how far their current level of saving will take them.Even with the growing imperative of providing “decumulation” support to plan participants, it remains vital to promote savings efforts. Ensuring that participants are receiving plenty of clear, informative and digitally accessible educational materials from service providers, and facilitating retirement account portability for employees are among the beneficial actions plan sponsors can take headed into 2022. Of course it is also key to initiate or increase the employer match. Even modest percentages end up making a big difference.


As you head into 2022, no matter how diligent you are in your fiduciary duties, it is wise to protect yourself—and your assets too. Colonial Surety makes it affordable for plan sponsors to obtain fiduciary liability insurance. Importantly, this protects you from personal liability in the event you are faced with allegations of a fiduciary breach. With Colonial’s package, the annual premium is less that what you would pay for even one hour with an expert ERISA lawyer—and we even include cyber liabiity insurance. Select your  affordable package in minutes and receive:

  • The ERISA bond required to protect the assets of the retirement plan from theft.
  • Fiduciary Liability insurance to protect you and your assets from personal liability.
  • Cyber Liability insurance to safeguard your company and plan from covered losses and expenses in the event of a cyber breach.


Obtain Colonials ERISA Bond Package With Fiduciary Liability Insurance Now!


Colonial Surety Company is rated “A Excellent” by A.M. Best Company, U.S. Treasury listed and in business all across the country. Serving customers since 1930, we are the trusted source for the pension industry to secure legally required ERISA bonds, fiduciary liability insurance and cyber-liability insurance. With a Trustscore of 4.8, we help safeguard plan sponsors, pension professionals and financial advisors — and keep their businesses compliant — with pain-free, efficient, and friendly service every time.