Episode summary
401(k) Real Talk Episode 202: July 22, 2026
Summary
Rising health care costs are pressuring small and mid-sized employers to reconsider broker relationships and, by extension, how they budget for retirement benefits. Fred Barstein says a recent study found 39% of these employers saw double-digit health care cost increases, with one in five facing hikes of more than 30%, and that 50% are likely or extremely likely to change brokers. He argues that the convergence of wealth and retirement is now being joined by benefits as employers and workers juggle retirement saving against escalating everyday expenses.
Barstein also highlights the growing case for HSAs over IRAs. He points to the triple tax advantage of HSAs, notes that they are only available with high-deductible health plans, and says assets reached $174 billion in 2025 with $89 billion in contributions, with projections of $234 billion by 2028 and $111 billion in new assets. In his view, advisors recommending HSAs could gain traction as employers seek ways to offset health care costs.
On the provider side, he sees Capital Group’s record keeper upgrades as a sign of movement up market, especially if bundled platforms can better support onboarding, plan flexibility, and participant education. He also argues that advisors need to become “tech plan architects,” using AI and other tools to streamline administration, and says a recent SEC ruling on dual share classes could eventually help ETFs enter 401(k) and 403(b) plans by removing operational barriers.
Key takeaways
- Fred Barstein says health care inflation is pushing 50% of small and mid-sized employers to consider changing brokers.
- He says HSAs are gaining momentum, with assets projected to rise from $174 billion in 2025 to $234 billion by 2028.
- Barstein sees Capital Group’s record keeper upgrades as a possible move up market toward serving larger plans and advisor partners.
- He argues advisors who help clients adopt AI and other technology will have a competitive advantage in DC plans.
- He says a recent SEC dual-share-class ruling could open the door for ETFs in 401(k) and 403(b) plans.
Notable quotes
“39% of these employers showed double-digit increases with one in five experiencing more than 30% price hikes”
“50% of employers are likely or extremely likely to change brokers according to the study”
“a recent SEC ruling allowing dual share classes could facilitate the entry of ETFs into 401k and 403b plans while eliminating their operational challenges”
How the episode opens
Greetings and a warm welcome to this week's edition of 401k Real Talk. This is Fred Barstein, contributing editor at Wealth Management's RPA Omni Channel and CEO at Traul, TPSU and 401kTV. I review all of this week's stories and select the most important and interesting ones providing open, honest and candid discussion you will not get anywhere else.
So, let's get real. First story, soaring health care costs for small and mid-size employers are causing them to re-evaluate their relationships with their brokers and could affect spending on other benefits like retirement plans. A recent study indicated that 39% of these employers showed double-digit increases with one in five experiencing more than 30% price hikes.
As a result, organizations are looking for a new breed of brokers who can help them understand fees in a world where transparency is challenging to help them find ways to cut costs. 50% of employers are likely or extremely likely to change brokers according to the study. Convergence of wealth and retirement at work is full on, but benefits will be next as employers and workers balance saving for retirement and paying for increased health care costs just as day-to-day expenses continue to escalate.
Next story, some wealth advisors are now recommending HSAs over IRAs realizing the triple tax benefits. Though still relatively new, started in 2004, and only available to employers using high a high deductible health care plans, momentum is mounting as assets reach 174 billion in 2025 with 89 billion in contributions and are expected to top 234 billion by 2028 with 111 billion in new assets. Annual contributions are limited to $4,400 for individuals and 80 8,750 for families.
If properly used, workers can pay health care expenses out-of-pocket, allowing the HSAs to grow, and then withdraw in retirement tax-free.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- 401k industry news
- healthcare cost pressures
- hsas vs iras
- record keeper upgrades
- etfs in 401k plans
Companies and tickers mentioned
- Capital Group
- Creative Planning
Watch the episode
Watch “401(k) Real Talk Episode 202: July 22, 2026” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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