Originally posted by Paula Aven Gladych on https://www.benefitspro.com

Chad Parks, president and CEO of The Online 401(k), wants to find a solution to the retirement crisis in America. He and some colleagues drove cross-country last year interviewing people from all walks of life about their retirement savings and their ability to retire. They put their findings into a film called, “The Looming Retirement Crisis in America.”

After doing his research, Parks believes there are six major obstacles to retirement in America, but the good news is that there are also solutions.

(By the way, if his solutions seem a bit obvious to you, it’s because you’re in the business and have been paying attention. And if that’s the case, Parks’ list could only help you make your case with prospects).


According to Parks, people need to save at work but to do that, they need an employer that offers a retirement plan. More than 40 million workers cannot save at work because they don’t have access to any sort of plan.

The solution? Mandated retirement savings plans, like auto IRAs, USA Retirement Accounts, 401(k)s and others.


Getting people to actually save money can be difficult. Some individuals won’t save for retirement even if they have access to a work-based plan.

The solution? Automatic enrollment. Features like this, added to an existing 401(k), have been shown to improve participation rates because the number of people who opt out of plans after being automatically enrolled is very small.

Saving enough

Many people don’t save enough for retirement and, even if they do save, they never increase the amount they save over their lifetime. A lot of workers save 3 percent their entire working lives, which isn’t enough to provide lifetime income in retirement.

The solution? Automatic escalation. Plans that offer this feature have had great success in building employee account balances. Every year, automatically, these plans increase employees’ deferrals into their retirement savings plan by at least 1 percent. The goal is to have everyone save between 10 and 15 percent of their pay in retirement savings over time.

Investing appropriately

Workers need to invest their money appropriately for their age, their ability to take on risk and with  current market conditions in mind, according to Parks.

The solution? Cost-effective professional advice. Studies have shown that workers who confer with a financial professional save and invest more appropriately for their own situation than those who don’t work with an advisor.


Accumulation of money is not the only goal, according to Parks. It also is important to adjust a person’s savings as their life changes.

The solution? Regular annual checkups. Plan participants should revisit their accounts at least once a year to make sure they are in the right investments and not taking on more risk than they can handle.

Retirement/decumulation/lifetime income

Many investors continue to invest in riskier options well into the years when they should be scaling back on the risk and preserving their savings. They also don’t know how to prudently “decumulate” their money and haven’t explored lifetime income options.

The solution? According to industry experts, many retirement plans don’t advise individuals to annuitize even if it would be in their best interest to do so. Instead, they handle longevity risk by setting a higher age for the end of the planning period. Seeking advice about annuitization can help individuals decide whether purchasing an annuity for guaranteed lifetime income is a good option for them.