People have many reasons to avoid saving for retirement and much of it relates to psychology. Many people don’t understand or refuse to consider retirement planning. Some may fear it’s already too late, while others are simply unwilling to make the changes needed to work toward a secure retirement. A survey from the MetLife Mature Market Institute identified a number of attitudes that people have toward employer retirement plans that may prevent them from taking action:
Snoozers: Snoozers simply don’t think about the future or plan for it.
Active Resisters: These people are aware of the future, but choose to not think about it or take any action.
Immobilized Worriers: Immobilized worriers know they should take action, but put off taking any action right now.
Oversleepers. Oversleepers feel they’ve missed their opportunity to take action and are now panicked or simply convinced they can’t do anything.
Wood Knockers: Relying on hope, wood knockers count on things “working out,” assuming they’ll have no health issues, unexpected financial demands, or other setbacks.
Plan B-ers: While aware of future risks, these people assume they’ll be able to adapt to financial problems or troubles, and they may have vague contingency plans like “downsizing” or “going back to work.”
Stewers and Brewers: While aware of the need to plan for the future, stewers and brewers take a long time before taking action, considering alternatives, and weighing options.
Making Decisions and Taking Action
Other types of people identified by the survey go beyond ignoring or talking about problems, instead choosing to take action and make decisions about their futures. Compromisers balance their current needs against their future needs, setting savings priorities while enjoying themselves. Preemptive planners actively work toward a specific retirement lifestyle and develop ways to protect themselves against unexpected scenarios.
The good news from the survey is that many people can be motivated to move from the inactive mindsets into the more active categories. That’s the basis of The Participant EffectSM, which uses behavioral finance to analyze why people don’t make the best decisions and helps employer retirement plan sponsors structure their programs to change employees from inactive to active retirement planners. Find out more about The Participant EffectSM by calling 866-625-4611.
Tracking Number: 1-434962
This information was developed as a general guide to educate plan sponsors but is not intended as authoritative guidance or tax or legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation. In no way does advisor assure that, by using the information provided, the plan sponsor will be in compliance with ERISA regulations.
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