The defined contribution (DC) landscape is poised for transformative change, driven by advancements in retirement income solutions, small employer plans, and the integration of retirement and wealth management. 

Retirement income strategies have reached a pivotal moment, with a surge in participant demand, regulatory support, and innovative solutions like market-based, annuity, and hybrid options redefining how retirees access income. Meanwhile, small employer plans are experiencing rapid growth, fueled by state mandates, tax incentives, and scalable technology, democratizing retirement savings access for workers in smaller businesses. 

The convergence of retirement and wealth management is reshaping financial planning by integrating holistic strategies that address retirement, investment, and estate planning needs. Enhanced digital tools and scalable platforms are making these services more accessible, enabling firms to provide personalized, institutional-quality financial solutions.

 As the industry evolves, collaboration among stakeholders is critical to ensure these innovations translate into improved outcomes for U.S. workers. 

Finsum: By embracing these shifts, the DC ecosystem can help deliver financial security and peace of mind to a broader audience.

Dividend investors may find the S&P 500's current 1.2% yield underwhelming, but targeted ETFs offer an appealing solution. The Schwab U.S. Dividend Equity ETF delivers a 3.6% yield by focusing on high-quality companies with strong financials and a history of at least 10 consecutive years of dividend growth. 

Alternatively, the SPDR Portfolio S&P 500 High Dividend ETF emphasizes pure yield, offering a 4.3% yield by selecting the 80 highest-yielding stocks in the S&P 500. While the Schwab ETF prioritizes financial strength and diversification, the SPDR ETF leans into concentrated sectors like real estate and utilities, introducing some risk. 

Pairing the two ETFs can balance yield and quality, creating a diversified income stream for investors. 

Finsum: For those pursuing passive income, these ETFs provide accessible, tailored options that cater to varying investment goals and risk tolerances.

For investors aiming to balance steady income with potential capital appreciation, high-yield blue-chip stocks present an attractive option. These stocks represent well-established, financially robust companies with a history of consistent dividend payments, offering stability and income. 

Companies like Dow Inc., Verizon, and Pfizer stand out for their strong market positions, innovative strategies, and impressive dividend yields. Dow, with a yield of 7.22%, benefits from demand in high-growth sectors and sustainability initiatives. 

Verizon, offering a 7.00% yield, is expanding its 5G and fiber networks to drive future growth. Meanwhile, Pfizer, yielding 6.43%, leverages a robust product pipeline and strategic partnerships to maintain its industry leadership. 

Finsum: These firms highlight the appeal of high-yield blue-chip stocks for investors seeking reliable returns and long-term growth.

Protective Aspirations variable annuity offers clients flexibility and guaranteed lifetime income, addressing retirement concerns like market volatility, healthcare costs, and evolving financial needs. With features like SecurePay Protector, it enables higher early retirement income, while also adapting to unforeseen challenges. 

The single-age withdrawal rates stand out, allowing retirees to maximize value based on their exact retirement age rather than broad age bands. For healthcare, the SecurePay NH benefit provides additional income during nursing home stays without impacting lifetime guarantees.

 Protective’s focus on customization and strong guarantees ensures financial professionals can build tailored strategies for long-term stability and adaptability. 

Finsum: Variable annuities offer an appealing solution for those who want a little more flexibility in  their annuity  options for 2025

ETF issuers are continually innovating to meet the demand for buffer strategies, appealing to financial advisors and clients who prioritize downside protection, even if it limits potential gains. Often dubbed "boomer candy" for their popularity among retirees, buffered ETFs offer a sense of security akin to a safety net for nervous investors. 

The market for these ETFs has grown exponentially, with over 200 options managing nearly $46 billion in assets, a significant leap from just $200 million in 2018. These strategies typically shield against initial market declines, like the first 10%, while capping upside returns and are often tied to indices like the S&P 500. 

Variations now include funds offering complete downside protection or innovative approaches like Calamos Investments’ product, which protects bitcoin’s price, but caps gain at 10%. 

Finsum: Investors looking for stability particularly as they are aging could benefit from these strategies. 

The Salt Financial Annuity Index Report for December also serves as the 2024 year-end review, showcasing trends in annuity index performance. U.S. large-cap equities and gold delivered strong gains, while small caps, international stocks, and bonds lagged, contributing to better returns for equity-only volatility-controlled strategies over multi-asset designs. 

Despite solid nominal returns, higher volatility in technology-heavy indices reduced their risk-adjusted performance compared to broader benchmarks like the S&P 500. Excess-return structures in annuities, combined with elevated interest rates, weighed on returns, particularly for bonds and multi-asset indices. 

Equity-only indices tied to U.S. large caps led the pack, but the cyclical nature of markets underscores the importance of diversification. 

Finsum: Advisors should consider dynamic strategies to optimize their clients’ outcomes. 

Municipal bonds, often overlooked, are gaining attention as fixed income performs strongly, prompting investors to reconsider their portfolios for 2025. Gregory Steier from Brown Brothers Harriman, highlighted that with elevated yields and record municipal issuance, risks are relatively low, making this an exciting time for munis. 

Steier emphasized that, for 2025, high-quality municipal portfolios might even outperform equities. Munis are attractive for their liquidity, income, diversification, and tax efficiency, with national muni bonds offering advantages over state-specific ones. 

Investors can access municipal exposure through ETFs like the ALPS Intermediate Municipal Bond ETF (MNBD), which focuses on bonds exempt from federal taxes, offering an active approach and strong returns, outperforming its benchmark. 

Finsum: This strategy could be a compelling option for those seeking solid yields to kick off the new year.

Sixteen years ago, alternative investments barely featured in most portfolios, aside from a modest allocation to commodities. Options for retail investors were limited, with most alternatives either prohibitively expensive or inaccessible. 

Today, portfolios tell a completely different story, with many being dedicated to alternatives like private equity, private credit, and reinsurance, reflecting how the landscape has evolved. 

Advances such as interval funds and lower fee structures have opened doors for individual investors to tap into the benefits of these assets, including the sought-after illiquidity premium. Unlike the past, where high fees often negated returns, competitive pricing and improved liquidity have made alternatives a more viable choice. 

Finsum: These innovations now allow for greater diversification and the potential to cushion traditional portfolios against market volatility.

Defined contribution retirement plan advisors are increasingly prioritizing income solutions to help participants navigate the complexities of their post-work years. The latest research from Escalent’s Retirement Plan Advisor Trends™ highlights a sharp rise in advisors recommending these options, growing from 21% in 2022 to 30% in 2024, with more expected to follow. 

Despite this uptick, no single approach has emerged as the standard, underscoring the need for continued innovation. Popular strategies include income-generating bond funds, target-date funds with guaranteed income components, and systematic withdrawal programs, although high fees and portability concerns remain significant barriers. 

A separate Escalent study reveals that only 17% of plan participants feel confident in converting savings into sustainable income, particularly among Gen Xers. 

Finsum: This presents a clear opportunity for financial firms to educate advisors and develop innovative solutions that address these anxieties while tapping into a growing market.

Technology stocks are making a strong comeback, with the Nasdaq Composite and S&P 500 approaching record highs after their recent pullback. For those exploring artificial intelligence opportunities, stocks with reasonable valuations and solid growth potential remain attractive. 

Evercore strategist Julian Emanuel identifies promising options like Visa and Micron Technology, which leverage AI to enhance performance and competitiveness. Visa's adoption of AI-driven fraud prevention tools is expected to drive earnings growth of over 12% annually for the next two years. 

Similarly, Micron’s AI-related components, crucial for powering Nvidia’s chips, position the company for a 25% annual sales increase through 2026. 

Finsum: These examples highlight how AI can fuel profitability and create sustained momentum in select technology stocks.