How Managed Accounts Are Reshaping Retirement Outcomes

Retirement planning is not one-size-fits-all. Using millions of participant records across thousands of plans, new research examines how personalization, participant behavior, and plan design influence retirement outcomes. 

In this video, Spencer Look, Associate Director Retirement Studies, Morningstar Retirement, and Michael Levine, VP Internal Sales and Support, Morningstar Retirement, introduce the Defined Contribution Outcomes Model and explore how managed accounts can help improve participant outcomes across a range of plan designs.

Spencer Look: The way we save for retirement is evolving, and understanding what actually drives outcomes has never mattered more. Our team at the Morningstar Center for Retirement and Policy Studies is excited to introduce the Defined Contribution Outcomes Model, or DCOM.

It's a groundbreaking framework developed to evaluate how plan design changes can help improve retirement outcomes. This video will explore how DCOM is reshaping the future of defined contribution plans.

Michael Levine: Retirement planning isn't one size fits all. Traditional studies often overlook the distinct behaviors and needs of plan participants, treating savings rates and investment decisions as fixed. DCOM helps bridge this gap by combining behavioral insights with advanced simulation. This helps deliver a clearer picture of how personalization, automation, and plan design impact retirement outcomes.

Managed Accounts as a service is transforming retirement outcomes by helping deliver real value to participants. It helps democratize access to professional investment guidance, ensuring that younger and lower income participants can see meaningful improvements. Moreover, they complement existing plan features like auto enrollment and escalation, providing insight into how personalization and automation can work better together.

Look: Our research shows that managed accounts boost retirement outcomes across investor types, with do-it-yourself investors seeing the largest gains. It also shows that the percentage of plans with auto escalation that stand to benefit from managed accounts is 92%. Younger participants may see the most significant benefits, as starting early amplifies impacts of managed accounts over time. And managed accounts deliver the greatest relative improvements for lower income participants, helping make retirement outcomes more equitable.

We believe DCOM is a game changer for understanding how personalization shapes retirement outcomes. Whether you're a plan sponsor, policy maker, or plan participant, this research highlights the power of managed accounts to help improve financial futures. DCOM doesn't just evaluate retirement plans, it helps design them.