Morningstar has rolled out the next generation of Morningstar Retirement Manager, an advice and managed account service for defined contribution participants in the United States.
The new version of the service combines the best features of the original Retirement Manager with the Advice by Ibbotson methodology, the company said. Among the most significant enhancements is the addition of Income Secure, a program that provides individualized, tax-efficient retirement income drawdown advice.
Retirement Manager evaluates all of a participant's holdings across both taxable and tax-deferred accounts and provides a participant with a specific, individualized drawdown plan that outlines how much a participant can pull from each account each year, considering taxes and minimum required distributions.
Retirement Manager also offers enhanced investment recommendations that reflect the latest liability-driven investment methodology. Liability-driven investing recognizes that investors in or nearing retirement face different risks than those in the accumulation phase. For example, two investors may have the same stock-bond split in their portfolios, but the investor closer to retirement has greater need for inflation, currency, and interest rate protection than someone further from retirement. Participants who use Retirement Manager will continue to get investment recommendations that are suited to their risk capacity, but now they will also be more sensitive to the unique risks associated with their life stage.
Another significant enhancement is more holistic retirement planning advice that suggests what age to retire in order to help participants meet their goals. In addition, if a participant is not saving enough and has reached the annual 401(k) savings limit, Retirement Manager will provide participants with asset allocation and savings recommendations for an outside taxable account.
Together, Morningstar's registered investment advisory subsidiaries are the largest providers of managed accounts, serving more than 800,000 participants.