Could a National Retirement Dashboard Disrupt Financial Planning?

In 1999, Denmark introduced a first-of-its-kind “pension dashboard” at www.PensionsInfo.dk to make it easy for Danish workers to track the activity in their retirement accounts. Over the next two decades, several European countries followed suit and introduced their own versions of the Danish site, many of which were launched in conjunction with national authorities.

More than two decades after Denmark launched its dashboard, the idea arrived on U.S. shores in the form of a white paper drafted by the AARP Public Policy Institute, the Urban-Brookings Tax Policy Center, and the Brookings Institution. The 2020 paper suggested that such a resource in the U.S. “could reduce the strain that a complex retirement system imposes on households.”

The COVID-19 pandemic introduced a number of urgent national concerns that put the idea of a national retirement dashboard for U.S. workers on the back burner. However, in 2024, the idea was revived in a U.S. Government Accountability Office (GAO) report commissioned to assess how retirement accounts aided U.S. workers during the pandemic. The report suggested that such a tool could be valuable to investors who are often confused by the complexities associated with financial planning in today’s culture.

As momentum for such a dashboard grows, U.S. financial advisors should begin to consider how the emergence of this resource could disrupt financial planning and how they might respond.

What a GAO-endorsed dashboard would address

The economic turmoil triggered by the COVID-19 pandemic caused financial hardships for many in the U.S. To help lighten the load, the U.S. Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020.

CARES may be best remembered for the $300 billion in cash payments made to American taxpayers in the form of economic stimulus checks, but it also authorized a number of other provisions aimed at injecting money into the economy. One of the provisions empowered penalty-free withdrawals from 401(k) accounts.

Following the pandemic, the GAO was asked to assess how the 401(k) provision of CARES had been utilized. Its findings, which were released in a report titled “401(k) Plans: Additional Federal Actions Would Help Participants Track and Consolidate Their Retirement Savings,” showed that a large percentage of workers — approximately 80 percent — had access to the provision, but only a small number of plan participants — 6 percent — took advantage of it.

Based on its findings, the GAO determined that a lack of knowledge, rather than a lack of need, may have contributed to the low engagement with the provision. The GAO reported that people often lose track of retirement funds during job changes. When the pandemic struck, losing track of funds meant losing the opportunity for a penalty-free withdrawal.

The GAO recommended steps that would address the challenges related to tracking and consolidating 401(k) accounts. Its report envisions a dashboard that would provide data on current accounts and those held while at previous jobs, which two-thirds of account holders surveyed by the GAO said they would find helpful. It also suggests establishing automatic plan-to-plan rollovers following job changes to remedy what those surveyed reported as a complex and confusing rollover process.

The GAO report suggests that additional financial planning resources could be incorporated into a U.S. retirement planning dashboard. Citing features provided by other countries on their dashboards, the report highlights resources including standardized retirement income projection tools, information on payout methods, and models that show the potential effects of scenarios such as inflation or a critical illness on retirement planning.

How a national dashboard could reshape retirement planning

Recent statistics indicate that Americans are pessimistic about retirement planning, with nearly 70 percent reporting that they doubt they will ever be able to retire. For most, looking for hope often involves turning to a financial advisor for guidance on how to build momentum.

A national dashboard that offers the type of resources the GAO envisions, however, would change the equation. Suddenly, Americans seeking guidance and hope regarding retirement would have access to a free and personalized resource, empowering them to take a DIY approach to financial planning. It could also leave investors without a comprehensive understanding of how their actions might impact their long-term earning potential and buying power.

For example, providing guidance on accumulation without equal guidance on disbursement could mislead investors about the lifestyle their investments can finance. Investors could find themselves running out of funds long before they anticipate, without the type of understanding expert advisors often provide on managing taxes, accounting for healthcare, and other nuanced issues that arise once the accumulation phase has ended.

A national dashboard that empowers DIY investing also raises the risk of investors responding rashly when market fluctuations lead to a loss of value in their accounts. Advisors can help investors avoid making impulsive decisions as markets fluctuate, offering an expert perspective on developments and encouraging them to adhere to long-term strategies.

How financial advisors may need to respond

Financial advisors must expect that a free, easily accessible, and personalized national dashboard would cause their clients to question the fees they are paying for advice from private institutions. To respond, advisors would need to carefully consider their value proposition.

What services are you offering that go above and beyond those accessible through the national dashboard? How are the insights you provide more empowering or nuanced? How does the relationship you’ve built with clients so far continue to deliver value to them? In what ways can you extend a “human touch” that a national dashboard will not be able to provide? Exploring these and other related questions will help advisors to differentiate their services from those that could come online as a national retirement dashboard becomes a reality.

New compliance and liability issues could also arise for advisors if a national dashboard enters the investing landscape. What would be the ramifications of tapping into the data provided by the dashboard to assist in broader financial planning? What new disclosures or other compliance steps might be required? If the data provided by the dashboard turns out to be inaccurate, to what degree would an advisor be liable for using it to guide clients? Those are the types of issues advisors would want to ensure are being addressed, as Congress, which is the body with the authority to create the dashboard, is developing its design.

The GAO report is not the only recent activity that indicates a national retirement dashboard could soon become a reality in the U.S. Several recent laws passed and proposed in the U.S., including the SECURE 2.0 Act, include provisions aimed at encouraging increased engagement with 401(k) plans. If Congress decides the dashboard could play a key role in facilitating greater engagement, its development could become a priority.

To what degree the dashboard disrupts financial planning remains to be seen, as its impact would rely in large part on its reliability and the scope of resources it provides. Advisors can be assured, however, that a national dashboard would change the conversation, making it more important to convince investors that both information and insights are required for effective retirement planning.