How to Engage Younger Employees in Retirement Saving

June 29, 2012 ( – Saddled with student loan debt or a down payment on a house, younger employees see retirement saving as far off.

“When we use the term ‘retirement’, they tune out.” Danelle Kronmiller, director of marketing for Individual Investor Services at The Principal Financial Group, told PLANSPONSOR. “Our job is getting them to prioritize saving for retirement.”

Employee communications should engage younger employees by discussing retirement in current terms. Instead of telling younger employees the total amount of money they need for retirement, Kronmiller suggests plan sponsors and financial professionals show them how little a portion of their paycheck they need to stash away to reach their retirement goals.

That way retirement seems more pressing, or as Kronmiller said, “in the here and the now.”

Kronmiller also suggests sending targeted communications to younger employees. At The Principal, younger employees (members of the “Getting Started” life stage, clients who are between the ages of 20 and 34) receive a newsletter with information tailored to their needs.

Kronmiller also recommends plan sponsors set up automatic enrollment for their employees, especially younger ones. “[Younger employees] are very busy consuming multimedia and very social,” Kronmiller said. “They want to be automatically enrolled and set on a path for retirement so they feel secure.”

Kronmiller added that very few of those who are auto enrolled opt-out, making it a very effective tool for engagement.

According to Kronmiller, retirement is already on the mind of some younger employees who exhibit solid savings patterns at The Principal.

However, she acknowledged “the biggest hurdle for that group is inertia.” To get the ball rolling, Kronmiller suggests younger employees start saving for retirement as soon as they can, especially if their employer matches contributions.  

“It’s important to get younger people on the right path as early on as possible,” she said. “It’s much easier to set it up right at the beginning as it is to play catch up."