The PriceCheck&Save app is available for participants in 401(k) plans recordkept by Putnam. Powered by RedLaser, the Deal Finder section of the app enables a user to scan the bar code of an item he is interested in purchasing. The app then shows the price of the item and what that amount of money could translate into, in terms of monthly income in retirement, if it was saved to the participant’s 401(k) plan. The participant can choose to save that money to his 401(k) plan in a one-time pre-tax deferral.
If the participant decides not to save, he can search for the item at other retailers for a lower price. When the participant selects the lower priced item at another retailer, the app displays the difference between that new price and the original price and again shows what that money, if saved, would translate into in terms of monthly retirement income. A user is then given the opportunity to save that amount of money to their retirement plan, and the money will be taken out, on pre-tax basis, from the participant’s next payroll deduction.
There are no limits on how many times a participant can make this “impulse save,” said Edmund F. Murphy, III, Head of Defined Contribution, Putnam Investments.
“Putnam is hoping to create greater understanding in the marketplace about the critically important relationship between individuals’ spending of current income and saving of current income on their future retirement income. Spending and saving do not need to be mutually exclusive activities.” he noted.
The PriceCheck&Save tool is driven by the same logic as the company’s Lifetime Income Analysis Tool, considering account inflation, mortality, gender, and other inputs (see Putnam Introduces Retirement Income Calculator). It is part of Putnam’s larger educational effort of trying to reframe savings amounts and purchasing decisions by showing it as retirement income.
The income number is based on default settings of a retirement age of 65, a 90% confidence level, and asset allocation of 50% equities and 50% bonds. However, it does not consider current account balance and deferral rates, Murphy noted.
Other sections of the PriceCheck&Save app are the MyDeals section, storing deals that a participant has selected, and a Settings are that allows users to change the default assumptions used in determining the monthly retirement income number such as retirement age, asset allocation, and the confidence level. However, if those settings are changed, they are only saved for that session; the next time a participant logs in, the settings will revert to the defaults.
In the future, the company hopes to extend to other smartphones, Murphy noted.