A Good (Retirement) Education

When it comes to retirement income, plan participants still feel they have a long way to go.

According to the 2017 Retirement Confidence Survey by Employee Benefit Research Institute (EBRI) and Greenwald & Associates, plenty of American workers are stressed about retirement and yet doing little to change their fortunes. Three in ten workers report feeling mentally or emotionally stressed about preparing for retirement, and 30 percent say their worries about personal finances follow them to work, with half of those respondents saying the worry is impacting their productivity.

Yet the same survey shows that few workers are actively trying to resolve their dilemmas. Just 4 in 10 say they’ve tried to figure out how much money they’ll need in retirement. And just 38 percent have calculated what income they would need monthly during retirement.

For advisors and plan sponsors, there is some good news. Over half of those surveyed (52 percent) say that retirement planning programs would boost their productivity. That means roughly half of plan participants are eager to take part in educational programs or receive educational materials that will help them set and reach their retirement goals.

Advisors and plan sponsors should start here:

Understanding your participants. Before sending out emails or filling up your online resource center with information, get to know your plan population. What factors are impacting their finances now and in the future? What is their savings behavior currently? The answers can help you devise a better educational mix that makes saving for retirement easier.

Educate using methods they’ll notice. In advertising, messaging is spread across any number of media in order to reach the maximum number of consumers. The same goes for plan participants. Create multiple communication streams to reach the largest number of plan participants. Try email, printed communication, online resources, virtual meetings and in-person sessions to ensure you’re getting in front of as many participants as you can.

Create a retirement planning event. Advisors and plan sponsors can set aside one day a year to work one-on-one and in group sessions to help participants review their retirement plans. Are they taking full advantage of employer match? Are they saving enough monthly? How could considering a different investment mix increase results? Give hypothetical samples to illustrate the impact of various options on the retirement portfolio.

Teach participants how to automate. Are they enrolled in automatic annual contribution increases? Are they using online tools to help match their savings window with appropriate investment options?

Rely on worksheets. Sometimes the easiest way to give participants a comprehensive view of their retirement income is to have them calculate it.  Monthly living expenses worksheets and monthly income worksheets can help participants see exactly what they can expect in retirement, and help them make adjustments as needed.

Retirement advisors and plan sponsors can be the missing link to a participant’s retirement health. By implementing simple educational tools and methods, advisors and sponsors can help their participants achieve a happier, more stress-free retirement.