Language Messaging For Retirement Planning May Be More Dependable Communication

Communicating retirement concepts to plan participants through clear, jargon-free language may be more dependable and effective than using imagery, suggests new research from Capital Group.

Retirement plan participants may respond in more optimal ways and be prompted to act through customized messages tailored to specific generations, the study shows.

The Capital Group survey, The Art of Retirement Communications: How Well Do People Today Connect With The Language and Images of Retirement?, suggests best practices for plan sponsors and also highlights imagery and messages to avoid.

“The largest finding is the importance of language, which we know from past [research] isn’t connecting,” explained Toni Brown, head of retirement strategy at Capital Group, referring to previous feedback that participants did not recall plan communication. “What this [survey] says clearly is it can connect, [but] we need to focus more on particular generations and think about images that are clearer in what they communicate.”

The language that is selected for retirement communications is critical to prompting participants to act, important to bolstering retirement preparation and a more dependable way to communicate than imagery, the study finds.

“Interestingly, language was found to be more meaningful and resonated with people more than images,” Brown said. “That was surprising, because we [usually] think pictures and images are stronger, [but] that is not the case in this research, because it’s very difficult to imagine retirement [for everyone]. Every individual is unique, and there isn’t a picture that specifically says, ‘retirement’ in the way a picture says, ‘This is a basketball game.’ There isn’t something that specific, and it makes [the messages] less meaningful than you would expect.”

Capital Group examined language and imagery by analyzing the language used to communicate with retirement plan participants to see if it was excessive or heavy with jargon and to understand the effectiveness of images shown. To investigate these questions, the research proceeded in three phases:

• Audit: compiling a library of hundreds of written messages and images drawn from the current retirement landscape.
• Reaction:  following an assessment of preliminary participant reactions to establish a testable data set, the researchers recorded respondents’ “gut reactions” to the images and written messages using a swiping exercise on respondents’ mobile phones.
• Discussion: speaking with survey respondents to delve deeper into participants’ feelings and reactions.

Examining Retirement Language

Researchers categorized existing communication themes into 17 general, current and common messages. The survey showed planning messages as most common (20%), followed by product information (13%) and factual messages (12%).

Planning statements such as, ‘Plan the retirement you deserve,’ scored 44% for their appeal to respondents and 42% for prompting action. Enjoyment statements such as, ‘Save enough today to enjoy a comfortable future,’ were 48% on appeal and 45% on action; and prevention statements such as, ‘Unexpected expenses can derail you,’ scored 24% for appeal and 26% for taking action, the survey found.

Researchers examined participants’ “gut reactions” to the different forms of language by asking respondents to rate how appealing the messages were on a scale from 1 to 10.

The survey found fact statements scored, on average, an appeal from respondents of 7.8, with product-related messages at 6.9 and questions—such as, ‘How much is enough to save for retirement?’ at 6.5.

“That appealed differently to different generations,” added Brown. “That appealed to Millennials and Gen X but ranked lower with [Baby] Boomers, who are probably thinking that they’re beyond planning.”

Examples of useful messaging in this area could be suggesting a visit to a planning and guidance center or [urging] participants to “‘take a look at our guide on smart planning,’” added Brown.

Brown explained, “’Smarter and better resonated with Gen X. Examples [are] retirement smarts, saving smarter for retirement and [how to] achieve better retirement outcomes; those worked for Gen X. [However, Baby] Boomers did not like that as much. They might have felt that a bit condescending. What did work well with Boomers was enjoyment, and examples [are] enjoyment phrases [such as,] ‘Today’s dreams can be tomorrow’s reality,’ ‘A future that’s certain’ [and] ‘Realize your vision for the next stage of your life.’”

Respondents then were asked to swipe right on their mobile phones during an exercise if they felt engaged and compelled to act, or to swipe left in response to a message that did not resonate, according to the survey.

“The second thing we found … is that negative messaging isn’t effective. By far, more positive words and more positive images were better received,” Brown explained.

In contrast to negative messaging, the survey noted, respondents’ reactions to positive written messages were significantly more positive than to imagery alone, because respondents took less time to arrive at a response or to a degree of certainty.

Examining Retirement Imagery

Capital Group’s survey also examined retirement imagery to gain a better understanding of how imagery can contribute to better, more useful and more robust communications to participants.

Researchers identified 17 categories of images in the audit phase of the study, and those were narrowed down to eight that resonated the most with participants. The most prevalent were scored on their appeal as judged by respondents’ swipes:

• Images that include scenes of people helping each other: 50%
• Images include people working on computers or tablets, or meeting with advisers: 47%
• Images showing older people receiving health care or navigating obstacles: 44% 

“Images that were well received would be older people actively engaged, enjoying themselves or doing something productive,” explained Brown. “Images that would not have resonated as much would be images of older people with presumably a second job.”

‘The research also shows generational differences in workers’ reactions to imagery, according to the survey. Whereas Millennials are the most likely to “cite images in existing communication are not appealing. [or] relatable to them—[because] they mostly notice Boomers and then tune out,” the survey states. “Technology [also] matters [because Millennials] are much more strongly drawn to images showing modern use of devices for planning.”

The survey found Gen X is the most vocal subset about craving more ‘substance’ from communications, including data and awards, while Baby Boomers want empowering imagery and do not appreciate being depicted as limited because of their age, confused or at the mercy of a complex industry, according to the survey.

Plan sponsors can take advantage of the survey findings with specific tactics like examining their participant demographics based on age, segmenting the populations as such and tailoring appropriate messaging to each group.

“It takes a willingness to focus their energies on those workers who are age 55 and above, and that is different, especially as we’re in this time period changing the defined contribution system from a savings system to a retirement system,” explained Brown.

She added, “[plan sponsors can] think about literally auto everything they can for younger participants and [then] focus their time and energy on those [participants] who are 55 and older for a couple of reasons: maybe they can focus on the segment and produce language and images that resonate and have a stronger connection, and presumably those individuals are also more receptive to hearing from them.”

The survey was conducted for Capital Group by Escalent in Q4 2021, with data from surveys and interviews from 2,451 employed U.S. adults, including both advised and self-directed investors and a mix of age, gender and race/ethnicity. All qualified as investors by having at least one account, such as an IRA, employer-sponsored retirement account, brokerage account or digital investment account.