“An object at rest or in uniform motion will remain in that state unless an external force acts upon it.”
Newton’s First Law of Motion, 1687, translated from Latin
Isaac Newton was experimenting with inanimate objects when he discovered the laws of motion. But we in the retirement industry know only too well that these laws also apply to human nature. In an age when it is up to employees to take action in order to build retirement security, inertia has been a major impediment.
Fortunately, the leading behavioral economists of our time are showing us how to harness the power of inertia to work for retirement savers instead of against them. Read more
The Health-Wealth Connection – Understanding the power of a physically and fiscally fit workforce
I was at an industry meeting recently speaking to a group of employers, retirement plan record keepers, and financial advisors about the state of retirement readiness in America as we move from old America (working for one employer and defined benefit pension plans) to the new America (multiple jobs and defined contribution plans).
The central theme of the talk was that while Americans are not saving enough, viable solutions to get more Americans on track are becoming increasingly clear. We just need to move faster. Read more
Cause and effect is a fairly simple concept that can be applied to almost every decision, action, or in this case, legislative ruling. The Supreme Court’s recent decision, declaring a portion of the Defense of Marriage Act (DOMA) unconstitutional, has received much public attention. However, something that has been less discussed is the ruling’s effect on retirement plans. Read more
Nobody likes to have something taken away from them, especially kids. At least at my house, when one of my kids takes a toy from another one I always have to intervene. Of course, two minutes later the toy is laying on the floor and no one is playing with it. They have quickly moved on to something else, but there was still an emotional outburst.
You also hear a version of this from employees who are not contributing to their retirement plan. They often cite “I can’t afford to” or “I have too many other priorities” as reasons. This emotional response is a big reason why some plan sponsors are apprehensive of implementing automatic enrollment. They are afraid of the reaction/feedback they will have to deal with by employees who all of a sudden see a reduction in their paycheck. Read more
While I love college football, I’m not a pro football fanatic by any means. I do enjoy a few good pro games each season – and am so glad those painful pre-season games are behind us! Yet I’m always intrigued by how the coach will play their star players for maybe the first quarter and then usher in a gaggle of no-name back-ups to finish it out. It makes for must-snore TV.
I know it’s for good reason – they want to keep their starters healthy, evaluate their second and third stringers, etc. But I wonder if they don’t go with their best line-up, how will they really know what level of talent they’ll have on the field once the real season starts?
I liken this to what I learned from the recent results from surveys by the Plan Sponsor Council of America. I realized that the 401(k) plans were largely outscoring 403(b) plans in some key plan features. Read more
Safety is often thought about in terms of the present: keeping children out of harm’s way, protecting family, wearing a seat belt…the list could go on forever. But, how often do we ask ourselves, how is the safety of my financial future?
Employer sponsored 401(k) plans and other work site retirement plans have helped millions of workers save trillions of dollars. These dollars not only help create security, but also peace of mind that medicine can be paid for and unforeseen situations can be taken care of. And most importantly, these dollars help ensure quality of life can be sustained long after retirement. Read more
Ah, summer time! I’m not one of those people who prefer summer over the other seasons, but I will admit it has its delights. For example, I was able to get together with one of our field service leaders recently, and we had some time to throw a line in the water and do a little fishing. Some people play business golf. I do a little business fishing.
(Maybe someday, if I could ever elevate my golf skills to “lousy”, I could add a little business golf in there as well.)
Whether it’s fishing or golf, the opportunity to maintain and develop business relationships on a face to face basis is of key importance. Read more