Study highlights the attitudes that pose a threat to retirement security and those that help lead to savings success
RADNOR, Pa., March 15, 2016 – According to Lincoln Financial Group’s 2015 Retirement Power® Participant Engagement Study, there has been a dramatic uptick in the number of participants who follow their instincts when it comes to saving within their employer-sponsored retirement plans— accounting for nearly half of all plan participants.
While these savers admit that their retirement savings habits are not ideal, they do agree that one-on-one meetings are the best way for them to receive information, creating an opportunity for plan sponsors to increase engagement and improve outcomes through in-person communication.
The Rise of the Adventurers
Lincoln’s study shows that the Adventurers – one of 12 retirement plan participant profiles identified by the study – has increased the most dramatically, rising to 32 percent of all plan participants, from 17 percent in 2012. The retirement plan profiles in the study are determined based on a combination of three engagement levels – more engaged, on the fence and less engaged – and one of four decision-making styles:
- Advice seekers – typically rely on professional help and are confident in their ability to save
- Fact finders – turn to numbers and research, and tend to be optimistic but anxious about saving
- Instinct-followers – tend to act quickly, confidently and with little input
- Info-explorers – strive to gather broad input, which can cause information overload
The Adventurers is a group of less engaged instinct-followers, spanning all ages and income levels.
The study suggests that this group could be doing more to save for retirement, as about half are saving less than 10 percent in their workplace retirement plan. They tend to be less retirement-focused than their peers, and the majority by their own admission are not doing a good job preparing for the future. The group may also need the most help setting – and ultimately achieving – their retirement goals. Only 16 percent have set a retirement goal this year, compared with 36 percent of the general population.
“While individual savings behaviors can be hard to change, today’s plan sponsors are faced with the opportunity to better equip plan participants with the tools they need to succeed,” says Jamie Ohl, President, Retirement Plan Services, Lincoln Financial Group. “Working with participants allows today’s businesses to reach all types of savers within their ranks, and help put these individuals on a path towards the retirement they envision.”
Making it Personal
When it comes to decisions such as how much money to contribute and what investments are made, 53 percent of all savers agree that in-person communication is the best method to motivate those decisions. Yet only three in 10 participants currently work with a financial professional, and only a quarter have a formal, written financial plan.[pullquoye]
“We know that in-person guidance is one of the most powerful ways to motivate employees to take positive actions,” said Ohl. “That is why Lincoln’s high-touch model is able to drive such powerful outcomes. While the average saver’s retirement account balance is $68,000, the average account balance of a plan participant enrolled within a Lincoln plan who has received one-on-one support from a Retirement Consultant is $128,0001. That’s significant, and shows the impact in-person guidance can have on a savings trajectory.”
Lincoln’s study also reveals good news for those who set annual retirement savings goals: they are more likely to make smart savings decisions.
Ninety-one percent of savers who have set a specific goal for the amount of money they’d like to set aside in retirement savings this year will meet or exceed their employer match. Retirement confidence is also closely tied to setting goals, as 87 percent of savers with a savings goal this year say they are optimistic about having enough money to maintain the lifestyle they want in retirement, compared to 57 percent of savers without a goal.
“This study confirms what we as a business believe helps today’s savers prepare for retirement. When participants set achievable goals, have access to personalized resources and take advantage of one-on-one support, they are more motivated to take positive steps towards increasing their retirement savings,” added Ohl.
To learn more about the savings attitudes and behaviors of today’s retirement plan participants, visit www.LFG.com/RetirementPower.
Savers can take an online quiz to find their participant profile at www.LFG.com/RetirementQuiz.
About the Lincoln Retirement Power® Participant Engagement Study
The 2015 Lincoln Retirement Power® Participant Engagement Study is based on a national survey of 2,508 full-time workers ages 22 to 68 who have been contributing to their current employer’s defined contribution retirement plan for at least one year— with data weighted by demographics to mirror the 1 Lincoln Financial Group 2015 Satisfaction Survey
total population. Established in 2010, the Lincoln Retirement Power Program is a platform for research and viewpoints on central issues related to retirement planning. The program seeks to identify forward-thinking ways to help plan sponsors, intermediaries and participants. As part of the program, Lincoln sponsors both proprietary and third party research with an emphasis on what drives better retirement outcomes.
About Retirement Plan Services
For more than 60 years, Lincoln Financial Group’s Retirement Plan Services (RPS) business has been helping savers boost their retirement readiness through employer-sponsored plans. Our distribution force of more than 400 professionals, including institutional and wholesale distribution channels and advisor-based sales teams, work to provide plan sponsors with retirement plans that not only meet the unique needs of their plan participants but also align with sponsors’ total rewards strategies and help recruit and retain top talent. RPS Retirement Consultants, available onsite, online and by phone, develop long-term one-on-one relationships with savers to help motivate them to take actions that lead to better retirement outcomes. RPS offers personalized services, solutions and education to help plan participants get to and through retirement. The business serves approximately 1.4 million participants through 22,000 plan sponsors with $54 billion in assets under management as of December 31, 2015.
About Lincoln Financial Group
Lincoln Financial Group provides advice and solutions that help empower Americans to take charge of their financial lives with confidence and optimism. Today, more than 17 million customers trust our retirement, insurance and wealth protection expertise to help address their lifestyle, savings and income goals, as well as to guard against long-term care expenses. Headquartered in Radnor, Pennsylvania, Lincoln Financial Group is the marketing name for Lincoln National Corporation (NYSE:LNC) and its affiliates. The company had $219 billion in assets under management as of December 31, 2015. Learn more at:www.LincolnFinancial.com. Find us on Facebook, Twitter, LinkedIn and YouTube. To sign up for email alerts, please visit our Newsroom at http://newsroom.lfg.com.