Here’s what every plan sponsor should know as we head into a new year
As 2026 approaches, 401(k) plan sponsors are prioritizing three key areas: expanding financial wellness, ensuring regulatory compliance, and reducing plan costs.
Expanding Financial Wellness Programs
About 39% of sponsors are focusing on programs that help employees manage day-to-day finances and plan for the future. These programs go beyond retirement savings to include budgeting, emergency funds, debt management, and college savings, helping reduce financial stress and improve productivity. At Note Advisors, we provide this support to all plan participants by offering a one-on-one meeting with our Certified Financial Planners to address these topics outside the scope of their 401(k) plan, helping to enhance overall financial wellness.
Ensuring Regulatory Compliance
SECURE Act 2.0 introduces several changes for 2026, including Roth treatment of catch-up contributions for high earners, gradual increases in required minimum distribution ages, access for long-term part-time employees, and enhanced automatic enrollment rules. Sponsors need to update plan documents, payroll systems, and communicate clearly with participants.
Reducing Plan Costs
Around 70% of sponsors are exploring cost-saving strategies such as plan design changes, vendor evaluations, and multi-employer plan structures. Many are also using outsourcing and technology to simplify administration and manage fiduciary risk efficiently.
In 2026, sponsors aim to improve employee financial well-being, comply with new regulations, and manage costs. These priorities help ensure their retirement plans are effective, efficient, and supportive of participants’ long-term goals.
The Value of Professional Guidance
Research shows that individuals who work with a financial advisor tied to their retirement plan feel more confident in their decisions. They tend to contribute more regularly, invest in ways that better align with their goals, and report greater peace of mind. Having a trusted professional walk alongside you can turn confusion into clarity and uncertainty into action.
TJ Conway, CFP® APMA™ is a Financial Advisor and Retirement Planning Associate at Note Advisors. TJ works closely with plan sponsors and participants to support retirement plan enrollment, conduct ongoing plan reviews, and help align investment strategies with long-term financial goals. As a Certified Financial Planner® and Accredited Portfolio Management Advisor℠ (APMA®), TJ is committed to providing client-focused, high-quality financial advice. Connect with him on LinkedIn
Rethinking the question most people ask as they approach retirement.
When most people approach retirement, the big question they ask is: “How much can I safely spend each year without running out of money?”
It’s a fair question. But it’s the wrong one.
A better question is: “How do I set up a system that lets me spend confidently today, while giving me permission to adjust when—not if—markets (or life) throw me a curveball?”
That’s where retirement income guardrails come in.
What are retirement income guardrails?
Think of guardrails on the highway. They don’t dictate the exact lane you have to drive in—but they keep you from veering too far off course.
Retirement guardrails do the same thing for your spending. Instead of sticking to a rigid number year after year (say, the famous “4% rule”), guardrails allow you to take, on average, a higher withdrawal rate—so long as you make small adjustments when needed.
This flexibility is powerful because retirement isn’t a straight, predictable road. Markets go up and down, expenses change, and unexpected events happen. Guardrails help you adjust without losing your overall sense of direction.
Guardrail rules in practice
One of the best-known systems comes from Jonathan Guyton and William Klinger, who studied “dynamic withdrawal strategies.” Here’s the gist:
You start with a base withdrawal rate (say 5.4% of your starting portfolio).
You increase that withdrawal for inflation each year—unless the market gives you a reason not to.
Guardrails kick in when your withdrawal rate drifts too far from the original target.
For example:
If withdrawals climb above 6.5% of your remaining portfolio, you cut back.
If withdrawals drop below 4.3%, you give yourself a raise.
It’s not about following a strict formula—it’s about setting clear boundaries. Guardrails only work when the underlying portfolio is built and managed correctly. A portfolio that is too conservative won’t generate enough growth to recover when markets rebound. On the other hand, a portfolio that is too aggressive won’t provide a large enough “war chest” of stable assets to carry you through downturns—potentially forcing you to sell equities at the worst time.
Dynamic vs Static Withdrawals
Static Withdrawal Strategy = “Set it and forget it.” You pick a number (like 4% of your initial balance) and keep spending it, regardless of what markets do. Simple, but it can leave you with too much unspent money—or risk running out if markets turn south early.
Dynamic Withdrawal Strategy = “Adjust as you go.” You spend freely in good years and tighten up in tough ones. The tradeoff? Slightly less predictability, but much more security and flexibility.
Which one feels more like real life? (hint, hint: Dramatic)
A $2 Million Portfolio Example
Scenario 1: 4% (Pre-tax) Withdrawal Rate
That’s about $80,000 annually from a $2M portfolio.
With inflation adjustments and normal market conditions, research shows this level of spending is very sustainable. But can we achieve the same outcome (not running out of money) while spending more?
Scenario 2: 5.4% (Pre-tax) Withdrawal Rate
That’s about $108,000 annually from a $2M portfolio—$28,000 more per year than the standard 4% rule.
Can it work? Yes—with the proper portfolio structure and management
In a recession, you might cut back to $97,200 (a 4.86% withdrawal rate). Notice that’s still higher than the 4% rule based on the starting portfolio.
When markets are strong, you have the opportunity to give yourself a raise. For example, if your $2M portfolio grows to $2.5M, you could increase withdrawals to $118,800.
The real danger isn’t starting at $108k. The danger is insisting on that number no matter what happens.
The Behavioral Side: Why this Works
Retirement isn’t just math—it’s psychology.
One of the biggest fears retirees face is running out of money. Ironically, that fear often leads to underspending. Many sacrifice enjoyment in their 60s and 70s—when they’re healthy and active—just to preserve a cushion for their 90s.
Guardrails solve this problem because they give retirees permission to spend:
You know what your “lane” is.
You know you have room to go faster when markets are kind.
You know you’ll slow down when things get rocky.
That flexibility builds confidence. Instead of feeling like you’re walking a tightrope, you feel like you’re driving with a sturdy guardrail system in place.
The Bottom Line
Instead of obsessing over the “safe withdrawal rate,” focus on creating a guardrail system that works for you.
Start by figuring out your initial withdrawal rate.
Build in guardrails that trigger adjustments if spending drifts too far.
Make sure your portfolio is structured appropriately. Guardrails don’t work for every portfolio. If you’re unsure whether your portfolio is set up to support a higher dynamic withdrawal rate, please reach out to us—or your financial professional—for guidance.
Give yourself permission to enjoy the wealth you’ve worked so hard to build.
Because retirement should feel less like a tightrope walk and more like a road trip where you know the path is safe, even if you need to steer around a few potholes along the way.
Feel like you could use sturdier guardrails before you retire?
No portion of this commentary is to be construed as the provision of personalized investment, tax or legal advice. Please consult with the appropriate professionals for advice that is specific to your situation. Note Advisors, LLC can assist in determining a suitable investment approach for a given individual, which may or may not closely resemble the strategies outlined herein.
Join us on Thursday, October 9th, for an informative joint webinar hosted by AAA Medicare and Note Advisors designed to help you navigate two of the most important aspects of your future: Medicare and retirement planning.
In this session, we will cover topics such as:
Key Medicare basics and recent updates you need to be aware of
How healthcare costs can impact your retirement strategy
Working past 65 and enrollment periods
Retirement income planning and Social Security
Tax strategies for retirement
Estate planning strategies
Whether you’re approaching retirement or simply planning ahead, this webinar will give you the knowledge and tools to make confident, informed choices.
Who should attend?
Anyone nearing Medicare eligibility, preparing for retirement, or interested in optimizing their long-term financial plan.
Presented by:
AAA Medicare – David Kamholz, Licensed Insurance Agent
Over half of Americans have money invested in an employer-sponsored retirement plan. For many, it’s the foundation of their financial future and the cornerstone of their retirement savings.
Yet despite how critical these plans are, a surprising number of people still feel uncertain about investing. Some delay making contributions, while others avoid adjusting their accounts altogether. That hesitation can cost them valuable growth over time.
The good news? You don’t have to navigate it alone.
The Value of Professional Guidance
Research shows that individuals who work with a financial advisor tied to their retirement plan feel more confident in their decisions. They tend to contribute more regularly, invest in ways that better align with their goals, and report greater peace of mind. Having a trusted professional walk alongside you can turn confusion into clarity and uncertainty into action.
Why Business Owners Should Take Notice
If you’re a business owner and don’t yet offer a retirement plan, now is the time to consider it. The benefits extend far beyond just a savings vehicle:
Tax incentives: There are valuable credits available for setting up a new plan and even for making contributions on behalf of your employees.
Employee retention: A retirement plan signals to your team that you care about their long-term well-being, not just their role today.
Stronger workplace culture: Offering meaningful benefits helps attract top talent and strengthens trust with your employees.
Supporting the Future—Together
National 401(k) Day is a reminder that retirement planning is about more than numbers on a statement—it’s about building financial security and peace of mind. Whether you’re an employee making your first contribution or a business owner exploring plan options, every step you take today is an investment in tomorrow.
Angela M. Hall, Ph.D., CFP® is Note’s Senior Financial Advisor and head of Retirement Planning at Note Advisors. Angela works closely with business owners, professionals, and individuals who are busy making a life, not just a fortune. As a Certified Financial Planner®, her mission isn’t to make you an investment expert, but to guide you in achieving your most ambitious life and business vision by developing and maintaining custom wealth strategies. Connect with her on LinkedIn
