The Principal Financial Group found the higher deferral rate combined with the commitment to increase savings among those who attended one-on-one meetings could mean an additional $242,000 at retirement–based solely on employee deferrals. That could translate into an extra $905 more a month in retirement income, which is 69% higher than participants who did not have one-on-one education.
“We know from face-to-face educational meetings that retirement savers benefit from hearing a person explain how the retirement plan works rather than having to shuffle through documents by themselves,” said Barrie Christman, vice president, individual investor services at The Principal. “Take it a step further with personalized one-on-one meetings on company time and significantly higher numbers of participants are taking actions that can help get them to the 11% to 15% contribution range–including employer match—that we believe is needed over the course of a career to have sufficient retirement income.”
The analysis of participants covered by retirement plans through The Principal, who attended a one-on-one meeting in 2011, found that 92% agreed to take a positive action and 80% completed the action. The top actions were to increase savings rates now and commit to continue to increase them in the future.
On average, deferral rates were 9% higher among one-on-one participants compared to those who attended a group educational meeting.
Nearly ten times as many one-on-one participants (19%) chose to automatically increase their retirement plan contribution as those who participated in a group educational meeting (2%). On average, one-on-one participants chose to increase their contributions by 1% each year for an average of five years.