Dive Brief:
- Prudential Retirement executives last fall installed a photo kiosk at an employee benefits fair so people could see pictures of themselves altered to look 65 years old or so, according to a CNBC report posted at USAToday.
- The reason? To raise retirement participation. Jennifer Putney, vice president of participant engagement at Prudential, said the number of people who enrolled in a retirement plan or increased their contribution rate went up 60% from a year earlier, before the kiosk was installed. In other words, seeing themselves at 65 spurred them to get involved.
- With benefits enrollment season approaching, tools like photo doctoring are proliferating, as behavioral scientists search for ways to use ingrained patterns of behavior to induce people to save more for retirement, according to CNBC.
Dive Insight:
The article reports that inertia, especially as it relates to retirement saving, is a tough hurdle for employers to overcome. For example, without incentives, many employees don't enroll in a 401(k) or similar plans. But when plan sponsors automatically enroll employees in their plans, and offer an "opt-out" option instead, the number of participants can increase dramatically. The article cites a study in which participation rates among employees in auto-enroll programs under age 25 rose 39 percentage points, and 27 points for employees 25 to 34.
Turning retirement savings into a game is another idea for boosting participation, according to Jane Souza, senior vice president for digital platforms at Fidelity. Personalized messages when people hit a given savings target, or interactive models that show how different life choices affect future finances are some ways to encourage saving, Souza said.
"If you make things more fun, if you give people positive reinforcement, they will make more choices to get more positive reinforcement. It's playing into what is naturally motivating to people," she said.
