At the June 10 webinar, Navigating Retirement Savings, a panel of experts discussed the long-standing retirement savings gap as well as new issues arising during the pandemic.
鈥淗alf of today鈥檚 working households won鈥檛 be able to maintain their standard of living in retirement,鈥� said renowned retirement expert Alicia H. Munnell, framing a major theme of the webinar. 鈥淭he main reason is the lack of continuous access to a work-based savings vehicle. . . . And for those lucky enough to have coverage, this new era of lower returns is going to be challenging.鈥�
Alicia H. Munnell, Peter F. Drucker Professor of Management Sciences and director of the Center for Retirement Research at Boston College
Munnell is the director of the聽, as well as the Peter F. Drucker Professor of Management Sciences. The other two experts were Edmund F. Murphy III 鈥�84, P鈥�19, who is president and CEO of Empower Retirement and Great-West Life & Annuity; and Robert L. Reynolds, president and CEO of Putnam Investments and author of the book聽From Here to Security: How Workplace Savings Can Keep America鈥檚 Promise.
鈥淚 deeply wish we were able to hold this conversation in person. . . . But this is an opportunity to reach a wider audience,鈥� said Jonathan Reuter, associate professor of finance, who moderated the discussion.
The panelists shared their perspective based on years working in and studying the field, as well as up-to-the-minute insights stemming from the current economic implosion. For example, Reuter asked, 鈥淭o what extent did people freak out in their retirement plans in February and March and sell low . . . versus riding out the storm?鈥�
Murphy responded, 鈥淥ut of our client base, which is 9.6 million Americans, only two percent actually made some type of change in their asset allocation. . . . We thought we would have seen a flight to liquidity, and we just didn鈥檛 see that.鈥�
Reuter wondered about employers suspending matching contributions. Having studied that same issue in the 2008 financial crisis, Munnell said that her center was prepared this time around: 鈥淲e created a list of all the companies that suspended matches and we鈥檙e following it closely.鈥� On the whole, she said, 鈥渋t鈥檚 one of the most benign things you can do under financial pressure, versus widespread furloughs.鈥�
One interesting development this year, noted both Reynolds and Murphy, has been the evolution of formerly digital-only 鈥渞obo-advisors鈥濃�攁pps such as Betterment and Wealthsimple, which were meant to provide automated investment advice based on algorithms. Responding to customer needs, these apps have evolved toward a hybrid model that includes interaction with human advisors. 鈥淚n periods of uncertainty, people want to talk to someone,鈥� said Reynolds. 鈥淭hey want to confirm they鈥檙e going in the right direction or sitting in the right place.鈥�
The panelists all said they see bipartisan support in Washington for expanding access to retirement savings plans. In the next 10 years, said Munnell, 鈥淚鈥檓 convinced, like Ed and Bob, that we鈥檙e gonna fix the coverage gap, and do it on a national basis.鈥�