The Power of “10”

June 24, 2014 ( - From 10 Downing Street, the official home to the British Prime Minister, to David Letterman’s “Top 10” on the “Late Show,” the number ten has played an important role in the world lexicon.

It is used to denote identity, as in a cowboy’s 10-gallon hat, and infamy, like the FBI’s “Top 10 Most Wanted List,” and it represents importance in so many other ways. All one has to do is look to the excitement around the World Cup, and to the legends who have proudly worn the number 10 jersey; Pele, Diego Maradona, Zinedine Zidane, and Lionel Messi have all donned the number. When you think about it, 10 is really much more than a number; it’s an idea, a feeling, perhaps even a belief.  And there is power in the number 10.

The buzz in the minds of World Cup fans provides an interesting example we may be able to learn from.  These people clearly focus on a specific event and what they want to achieve. When it comes to saving for retirement, is it possible to focus people’s attention on the power of 10 and then harness that focus to improve retirement outcomes? I believe we can. Here’s how.

The idea is really pretty simple. Ten percent has long been an unofficial and loose standard with respect to how much of your income you should save over your lifetime to have enough in retirement. Now, am I saying that 10% is a perfect number to reach a secure retirement? No. In the same way that there are many soccer greats who have never worn the number 10, there is no perfect retirement savings number. But given that savings rates in company retirement plans are hovering around 6.5% to 7%, 10% saved over a person’s lifetime represents a marked improvement over where we are today. So in the spirit of Creating Clarity, what might our retirement plan balances look like if the National Message was a simple, “Save at Least 10% of your Annual Income?”

As a long standing practitioner of retirement plans, I know that landing on one number for everyone isn’t the perfect answer. But as Voltaire once wrote, “The perfect is the enemy of the good.” With that in mind, it’s exciting to think about how a clear and strong message to America about benchmarking 10% might change the retirement planning landscape for generations to come. Plan sponsors can help communicate to employees that they should be saving at least 10% annually for retirement. Sponsors using auto-enroll could start at 6%, and offer auto-escalation to help participants arrive at a 10% savings rate over time. 

When retirement plan participants hear the same “minimum 10%” message everywhere they turn—from plan providers, plan sponsors, financial advisers, newspapers, magazines, websites—I believe they will begin to understand the importance of the message and then act on it. In other words, a clear and consistent message will drive positive behavior. 

There is power in the number 10, but perhaps more important, there is even greater power in solidarity.


Stig Nybo, president of Pension Sales and Distribution at Transamerica


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.   

Any opinions of the author(s) do not necessarily reflect the stance of Asset International or its affiliates.