Motivating Participants to Take Retirement Savings Action

October 18, 2011 ( - October 16 marks the beginning of National Save for Retirement Week, an annual event endorsed by Congress and dedicated to encouraging employees to participate in their employer-sponsored retirement plans.

National Save for Retirement Week gives plan sponsors the opportunity to look for new ways to help participants save for retirement with a sense of pragmatic optimism that will help them achieve better financial outcomes. Employers who provide participants with compelling information and relevant resources are more likely to boost the retirement readiness of their employees while helping them feel better about reaching their retirement savings goals.   

Retirement Consultants, who are on the front line working with employees in person and on the phone, share these guidelines with retirement savers every day.  

Be Proactive – Participants who sit back and pay little or no attention to their employer-sponsored plans are setting themselves up for disappointment. By being proactive and taking advantage of all available resources, participants can take charge of their investments. Just like an annual physical, participants should meet with a retirement consultant or financial adviser at least once a year to do an annual check-up of their 403(b) plan or retirement savings plan. An easy way to remember is to schedule it around a birthday, an annual pay raise, or during National Save for Retirement Week. A plan check-up will help participants make sure investments are matched with their personal risk profile and on track with their overall retirement goals.  

Power Save – Research[1] has shown that while saving steadily in an employer-sponsored plan is important, it may not be enough for retirees to achieve success in their retirement years. Throughout a lifetime, there may be times when a saver receives some extra money from something like a bonus payment or a tax return. . By “power-saving” a portion of the money or the whole amount, individuals will have a leg-up on reaching their retirement saving goals. More importantly, power-saving early on, particularly between the ages of 30 and 40, will result in the greatest long-term benefits.  

Emotional Investing – One of the most common mistakes participants can make is becoming too emotional when saving for retirement. When faced with market volatility, savers often react and let their feelings drive impulsive actions. They become anxious about market fluctuations and move out of their investments into ones that they deem to be more stable. When this happens, people run the risk of being out of a strong investment when they could have ridden out the market’s waves. Simply put, savers need to stay the course and remain invested.  

Rollover AssetsAlthough it’s hard to predict the number of employers an individual will work for throughout their lifetime, in today’s world it is quite possible this number is higher than one might imagine – potentially resulting in a number of different employer-sponsored retirement accounts to manage and monitor. Having retirement assets in one place helps simplify investing and income planning and allows assets to grow. Sponsors can encourage participants to roll over balances from previous employers into their current company’s retirement plan – a move that will simplify their retirement planning process and create additional savings in the long run.   

[1]The Lincoln Financial Life Stages: Retirement PowerSM study was conducted by the research firm, Hearts & Wallets, LLC, and licensed by Lincoln Financial Group. The findings are exclusive to Lincoln and are based on the analysis of a licensed data set from Hearts & Wallets’ 2010 Investor QuantitativePanel, an online survey of 4,041 respondents representing a cross-section of U.S. households. The survey was concluded in April 2011. 

Resist Temptations to Borrow – A recent study[1] of baby boomers found that one-third had stopped putting money into a 401(k), IRA, or other retirement account in light of the recession. Additionally, 20% prematurely withdrew funds from these accounts, and subsequently one-quarter of respondents postponed their plans to retire. Borrowing against a plan can have a profound impact on a participant’s future retirement assets. By borrowing in a down market, savers miss out on potential returns if the market recovers. And borrowing may mean missing out on the ability for money to grow until the time of retirement.  

Start Young – While it is widely known in the industry that time in the market is crucial, many younger employees may not begin to participate in their employer-sponsored plans until they are further along in their careers, when they feel they can more comfortably afford the contributions. Retirement consultants often use time spent with participants to run through scenarios of what retirement could look like if contributions are increased by doing paycheck comparisons. In most cases participants realize that a few extra dollars deducted from their paycheck can make a significant difference in the next 15 years. Plan sponsors should place a particular focus on educating younger plan participants to save early on in their careers. By steadily saving income over time, these future retirees not only develop sound investing habits, they are realizing the potential for significant account gains over time.   

National Save for Retirement Week is an ideal time for plan sponsors to motivate their employees and communicate the benefits of participating in employer-sponsored savings plans. By following these tips, participants are well on their way to achieving a better retirement outcome.   


  • Garry Spence, Senior Vice President, Retirement Plan Services, Lincoln Financial Group  


NOTE: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.  

[1]Boomer Expectations for Retirement, Insured Retirement Institute, April 2011