Duck Duck Goose. Does anyone still play this game? Let me guess, there’s an app for that? It’s amazing how quickly that saying has taken hold. Technology has fundamentally changed the way we think, act and make decisions. Take a moment to think about how technology impacts your daily life.
People don’t learn and engage the way that they used to. The generational workforce is shifting and the younger generation requires more to stay captivated due to technology and competing priorities. Research shows that the average adult in 2013 shifts their focus every eight seconds if not fully engaged1. The engagement needs cannot be met with technical literacy alone; it must be combined with visual and emotional components.
Eight seconds, huh? So that’s 7 ½ different thoughts a minute – bills, work, house, kids, dog…did “saving for retirement” make the cut? I didn’t think so. We might have to create an app for that!
If only it were that easy. Unfortunately the workforce is a swirl of Boomers, Gen X and Gen Y employees. The US Department of Labor projects a dramatic shift from Boomers to a Gen Y workforce over the next ten years2.What are the demographics of your workforce? This data can be useful when creating a communication plan to engage your employees to “save for retirement.”
Even though the rapid advancement of technology has impressed itself upon all age groups, each one desires a slightly different approach to stimulate retirement savings. Here are some resources to help you meet your retirement objectives:
Automatic features: When given the choice to proactively opt-in to automatic escalation, very few do. Similarly, when given a choice to opt-out, very few do3.The impact of inertia within retirement plans can have a positive impact on getting people moving in the right direction. Combining automatic enrollment with automatic escalation can help to improve retirement saving outcomes4.
Check out this link for additional stats: Principal.com/retirementreadiness
Group meetings and one-on-one education: Historically, these educational meetings have been the focal point of communicating the importance of saving for retirement. They continue to be key steps in the recipe for success and can be even more powerful when blended with automatic features and social media.
Social Media: Social media can help you give small bits of information, along with being visually and emotionally appealing, engaging your shifting workforce. Do you know anyonewho doesn’t use some form of social media? Or someone who isn’t attached to their phone? Smartphones are now our multimedia connection to everything, our lifelines. It’s what we use to help make decisions.
Are you still with me? I tried not to exceed eight seconds! If you have any questions on the above concepts please contact your financial professional or plan administrator. Thank you!
***(1) National Center for Biotechnology Information, U.S. National Library of Medicine, Jan 2014 http://www.statisticbrain.com/attention-span-statistics/ (2) Monthly Labor Review, November, 2009 http://www.bls.gov/opub/mlr/2009/11/art3full.pdf (3) The Principal. Data based on a combination of 66,798 participants opting out of automatic increase and 72,030 opting in to the Principal Step Ahead Retirement OptionSM in salary deferral service plans as of 12/31/13. (4) Based on analysis conducted by the Principal Financial Group®, August 2013. The estimate assumes a 40-year span of accumulating savings and the following facts: retirement at age 65; a combined individual and plan sponsor contribution of 12 percent; Social Security providing 40 percent replacement of income; 7 percent annual rate of return; 2.5 percent annual inflation; and 3.5 percent annual wage growth over 40 years in the workforce. This estimate is based on a goal of replacing about 85 percent of salary. The assumed rate of return for the analysis is hypothetical and does not guarantee any future returns nor represent the return of any particular investment. Contributions do not take into account the impact of taxes on pre-tax distributions. Individual results will vary. Participants should regularly review their savings progress and post-retirement needs. Affiliate Disclosures The subject matter in this communication is provided with the understanding that The Principal® is not rendering legal, accounting, or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax or accounting obligations and requirements. Insurance products and plan administrative services are provided by Principal Life Insurance Company a member of the Principal Financial Group®, (The Principal®), Des Moines, IA 50392. © 2014 Principal Financial Services, Inc. t14101301oi – 10/2014