Preparing for the big wave of asset outflows | August 2016
Facing an unprecedented influx of retirees and the onset of associated mandated withdrawals from retirement plans, the retirement industry needs to acknowledge, understand and prepare for an unprecedented outflow of assets.
The confluence of the large number of retirees hitting Retired Minimum Distribution (RMD) status, and the massive amount of assets that they have accumulated throughout their lifetime, are going to cause a huge outflow of assets from retirement programs. This unbridled outflow of funds from these programs is going to have a material and adverse effect on the industry managing these assets.
Over the next 20 years, the cohort of individuals reaching RMD status will swell to 58 million people. During that time, billions of dollars of assets will be forced into retirement programs by RMDs. Upwards to $10 trillion of assets will be subject to RMD status over the next 20 years. Creating and adapting new strategies to retain, redeploy, or otherwise slow the exit of these assets will be paramount to the wellbeing of the industry managing these assets.
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