​At retirement, 401(k) plan participants typically are on their own to manage retirement income and develop a sustainable withdrawal strategy. But change is on the horizon with the development of in-plan personalized retirement income solutions powered by technology. Recent legislative changes and technological advancements are evolving the 401(k) from a savings vehicle to a retirement income plan. 

Many investors are looking at major market performance so far in 2022 with some unease. The pandemic, supply chain issues, a tight labor market, spiking inflation, anticipation of interest rate hikes, and now the situation in Ukraine have driven market volatility, prompting concerns about what comes next.

While short-term market movements can be challenging to predict, historical evidence points to two things for long-term investors to keep in mind:​

• Stocks (the driver of growth in portfolios) have produced positive returns, in excess of bonds (the risk-reducer in portfolios), over long enough time horizons. Historically, stocks earned a positive return over five-year periods 90% of the time, and have always recovered from even the worst downturns, such as the 1973-74 crash and the 2008 Global Financial Crisis, in at most six years.

Michael Sebastian, Chief Investment Officer

The hybrid qualified default investment alternative (hybrid QDIA) is a retirement readiness innovation that is growing rapidly in adoption. Here’s a quick overview, a discussion of how hybrid QDIA is gaining momentum with plans, and some next steps.

Overview
Hybrid QDIA is a holistic, dynamic, personalized retirement solution that utilizes two investment options: (1) a low-cost target date fund (or customized target date portfolio) investment, and (2) a managed account. Participants begin in the target date fund investment solution before automatically adding on managed account services when they reach a specified milestone, such as a certain age (or choose on their own to upgrade to managed account services.)

When Hybrid QDIA serves as the default investment option for a retirement plan, it provides planning for everyone regardless of the investment option. Being the default maximizes value added potential for all participants, enabling mass enrollment and engagement. In this way, it reaches all participants--early-, mid- and late-career, everyone has a plan. Additionally, the methodology and user experience are consistent throughout the participant’s career. 

NextCapital is very proud to have been awarded one of Chicago’s Best Places to Work for the second year running by Built In. The success of NextCapital as an organization is a direct output of the engagement, growth, and success of its people. 

To top it all off, we received awards in three categories: 

Best Places to Work (#37)
Best Midsize Companies to Work For (#10)
Companies with the Best Benefits (#43)
 
As we continue to deliver disruptive solutions to our partners in the financial industry, we look forward to growing our talented team. If you are interested in joining us at NextCapital, take a look at our current openings. ​