Retirement Planning: How Fintech is Revolutionising the Industry

Introduction

The dawn of the internet revolutionized every aspect of human life, including our finances. The consistent innovation in sectors such as artificial intelligence, financial technology, and algorithms have allowed financial professionals to integrate these newly developed technologies into the services that they can offer their clients. In this short article, we will briefly explore how the future of retirement planning has been revolutionized by financial technology. If you’re interested in preparing your finances for retirement, read on to find out how developments in financial technology could benefit you.

Automation

AI-assisted technology, mobile applications, and blockchain-based solutions now provide retirement planners with the opportunity to automate their finances. According to studies conducted by the World Economic Forum, automated saving technology could significantly increase savings rates, as it encourages individuals to make increasingly balanced, risk-appropriate decisions, and then automatically saves and invests the income for years to come. 

For individuals who struggle to save income or consistently invest that income for retirement regularly, automation could be the solution that allows you to break through the barriers preventing you benefiting from appropriate retirement planning strategies

Robo-Advisors

Regrettably, significant numbers of the population lack the financial literacy necessary for effective retirement planning. To an extent, robo-advisors can assist individuals with rudimentary advice and guidance that allows them to begin saving for retirement. 

Robo-advisors use algorithmic technology to optimize investment strategies that can be used to prepare for retirement. Users will be required to answer a series of questions regarding their finances to provide the robo-advisor with enough data to produce a prudent plan. 

Although these robo-advisors are still generally unsuitable for more complex financial situations, they remain a useful tool for the general public to begin planning for retirement. 

Cryptocurrencies

The development of Bitcoin in 2009 birthed an entirely new sector within the financial industry. Although considered highly controversial in its earlier years, and arguably still controversial, Bitcoin and other cryptocurrencies have become part of the retirement planning conversation.

Indeed, companies like MicroStrategy have become one of the first major companies to allow their employees to add Bitcoin to their 401(K)s. Although MicroStrategy was one of the first, they have certainly not been the last as major investment companies like Fidelity Investments join the ranks of companies offering cryptocurrencies to clients as part of their retirement strategies.

Whilst the prospect of investing in Bitcoin and other cryptocurrencies as part of your retirement planning may be exciting, these assets remain highly volatile, speculative, and risky. As such, they are unsuitable for a large number of individuals. We strongly recommend consulting a professional before incorporating these assets into your retirement planning strategy.

Security

When it comes to your finances, security should be your primary concern. Naturally, planning for retirement will require that large amounts of personal information and funds be provided to employers and third-party agencies. Implementing the appropriate financial technology into your retirement planning process can help to ensure that your data and funds are kept safe and secure.  

Conclusion


With innovation in these technologies regularly producing new and exciting developments, it is likely that the future of fintech will hold further benefits for retirement planners. If you are preparing for retirement but unsure whether your retirement planning strategy is right for you, or need help crafting a tailored retirement plan for your specific situation, contact one of our advisors today

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Dylan Soiza

Dylan is a qualified barrister in England & Wales and an experienced financial writer. Although most of Dylan’s investment experience revolves around the U.S markets and cryptocurrencies, he regularly writes about various financial topics. These topics include macroeconomic trends, shifts in monetary policy, and personal finance.

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