Fidelity myPlan Aims to Break Retirement Savings Inertia

According to Fidelity’s own research, nearly three-quarters of individuals consider themselves planners when it comes to such things as vacations, birthdays and holidays, but when faced with something less immediate such as finance planning, the number is a far less robust 29%, with one quarter of Americans saying they have a clear retirement plan in place today.

Fidelity’s myPlan product means to help investors and plan participants stop procrastinating when it comes to retirement planning by simplifying the process and helping them over the initial barrier of getting started, which 58% of Americans say is the most difficult part, according to Fidelity research, and the biggest proponent of why the Americans are saving on average 3.3% annually for retirement.

The product is geared toward individual investors and plan participants, but is also something else plan sponsors can use to engage participants in retirement planning, Abigail Johnson, president of Fidelity Employer Services Company (FESCO) told PLANSPONSOR.com in an interview. Johnson put at the head of Fidelity’s HRO and retirement services business in May 2005, as part of a major management shift at the company where her father sits as chairman and chief executive officer (See Abigail Johnson Moves to FESCO in Sweeping Fidelity Reorganization http://www.plansponsor.com/pi_type10/?RECORD_ID=29244 )


The first part of the free Web-based product is called myPlan Snapshot, which gives the user a dollar estimate of how much they will need to retire in just minutes by asking only five questions that include monthly contribution amounts, expected retirement age, and preferred investment style.

The final figure comes in two variations, one if the market performs at average, and the other if it has poor performance. “It’s not a perfect [number], but it’s a darn good one. It’s better than not having an answer at all” said Ellyn McColgan, president of Fidelity Brokerage Company, at a news conference Tuesday in New York City held to punctuate the myPlan launch. The point, she continued is to get individuals thinking and on the way to planning.

The second part of the process is a revamped version of Fidelity’s Retirement Quick Check, a more in-depth step-by-step that helps users create an actual retirement plan – a process that takes about 30 minutes.

A Lesson in Immediate Gratification

One reason why people put off saving for retirement is a lesson is not only that financial planning seems too complex to tackle, but also that the need to do so is not immediate, said Brigette Madrian, a professor at the Harvard University Kennedy School of Government and an expert on employee savings behavior in employer-sponsored plans, at the news conference.

“Retirement planning does not have the same urgency as other complicated decisions,” such as mortgages, car insurance and taxes,” Madrian said, explaining that retirement planning lacks the same short-term deadlines such as needed to move in to a house or meet the April 15 income taxes deadline.

If the Snapshot segment of Fidelity’s myPlan satiates the affinity for immediate gratification, then Quick Check moves a step farther, and actually takes individuals into the planning stage. At least that’s the thought.