The cost of being a woman can now be quantified into one terrifying statistic: women are 80 percent more likely to be impoverished at age 65 than men. That’s according to this report from the National Institute on Retirement Security.
How have we arrived at a time when our mothers, grandmothers, sisters, and friends are facing a future of geriatric poverty? I’m not suggesting there’s a simple answer, but one thing is clear: The current retirement savings system isn’t working for many women.
This current system requires that you have access to a workplace retirement savings plan like a 401(k)…
Fifty percent — 75 million workers — do not have access to an employer sponsored savings plan. This is despite the fact that these plans are the primary source of retirement savings for working Americans.
Without one, these 75 million Americans can never retire.
These uncovered workers fall into two main groups, people whose small employers don’t offer a plan, and people who are part of the growing “gig” freelance economy and they don’t have a traditional employer-employee relationship.
Uncovered workers are facing a frightening future, with little or no savings, unprecedented economic pressures and increasing life expectancy.
A Case Study
For years, the retirement industry has been trying to assess peoples’ investment risk tolerance using a variety of methods. However, these methods have proven to be ineffective at assessing risk, and have instead both heightened investor anxiety and negatively impacted the usefulness of an advisor’s planning session. This is due in part to how these questionnaires are developed: they are heavily reliant on techniques based on mathematics, (including story problems) complicated data tables and investment jargon. …
Protecting American’s Retirement Savings
There is one question I get asked all the time. Whether at a dinner party, standing in line for coffee, or walking my dog — when people find out what I do in my professional life, they always ask the same question: “I have an old 401k from a job I had a long time ago, how do I find it?” It’s a good question and a big problem, one that impacts millions of working Americans.
The problem of “old” or orphaned retirement accounts is an unintended consequence of employer sponsored retirement savings plans. Now especially…
Trust is the gel in every single human interaction. It is a necessary component in all our relationships and partnerships, including the relationships we have with the companies we choose to engage with and rely on.
Trust-dependent decisions range from benign activities like trusting your flight will leave on time, or that a package will arrive as promised; to more consequential, potentially life changing decisions such as choosing a doctor or buying a house. The decision to participate and engage in a retirement savings plan is right up there…
Sweaty palms, stomach-churning, head spinning, that choking feeling in the back of the throat. Few things in our everyday lives have the ability to send fear into the heart such as when we are confronted with complicated math. Especially when this math is in the form of a story or word problem. Those who suffer from math anxiety experience discomfort to varying degrees when confronted with math problems. For many of us, math anxiety is a very real thing.
Scientists have found that math stress has a biological effect on the body, including the release of stress hormones like cortisol…
My organization, The National Association of Retirement Plan Participants, spends much of its time analyzing the retirement savings industry. We look for ways to improve and simplify the process of retirement savings for the millions of working Americans who are relying on this system for financial security.
This week we released the findings from our annual investor behavior study. The headline is: “Trust in financial institutions has dropped to an all-new low of just 8%”. This further erosion of trust is deeply troubling and my question is — how long are we going to go on like this?
What does your participant statement say about your company, your brand ethos, and your commitment to simplifying information in a way that helps people make important financial decisions? Not just important financial decisions, but perhaps some of the most important financial decisions a person will ever make in their lifetime.
For the past year, I have been looking at participant statements from a variety of recordkeepers, representing a wide-swath of plan sponsors. And if I were to summarize these statements I would say they are: anti-engaging, anti-trust building, and lack empathy. …
There are often very subtle differences between the various recordkeepers vying for a plan sponsor’s business. We often hear prospects saying that any of the candidates could do the job well and that it came down to “intangibles”. What are these intangibles?
In a recent NARPP study of DC plan sponsors we found that “trustworthiness” is the most important factor in selecting a new recordkeeper. This is not denying that technology, brand, service and investment performance matter. But these can often be fairly similar across recordkeepers in a sales competition.
When we start to look at the sales process through…
By Warren Cormier
People ask me all the time if I feel retirement education even “works”. The question usually starts with, “Why bother? Why not just go robotic on all plan participant decision points?” My response to this question is always, “without a doubt, education, when done correctly, works!”
I have been an educator all of my adult life. And I have seen, first hand, that retirement education can alter behaviors such as enrolling in a plan that had been passed up, adopting SMaRT, not cashing out, and virtually all other choices around financial decision making.
But this is only…
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