Watch your step, advisors! It’s your job to ‘mind’ the retirement gap

investmentnews.com:

Americans had better start acting like London commuters and “mind the gap” when it comes to retirement, or they could be in big trouble down the line.  

In the London Underground, a recorded message reminds passengers to be mindful of the space between the platform and the train. On this side of the pond, the so-called “retirement gap” occurs when the money one needs in retirement winds up being less than the amount one has saved.

In either case, the gap between where one currently stands and where one aspires to sit comfortably is fraught with danger. And in the case of retirement, it’s often up to financial advisors to provide both fair warning and guardrails to clients to protect them from peril.    

“We have 25% of working Americans that don’t have access to a workplace savings program,” said David Musto, CEO of retirement record keeper Ascensus. “That’s 57 million Americans that today aren’t consistently saving at the workplace for a better retirement and financial future. So we have work to do to ensure that we get more people into the savings system and encourage more of those individuals to save more over time.”

The first thing that has to happen to narrow that gap is the creation of more small workplace plans, Musto says. In fact, that’s currently happening, as Washington makes retirement a priority while innovation across the states is encouraging the formation of more of those programs.

The second thing necessary to alleviate the problem in Musto’s view would be to ramp up the automation and personalization of the investment experience. The third would be increased personalization and democratization of financial advice.

“We know that the primary reason people don’t save enough is that they’re facing other