Products September 8, 2016

Retiremap 2.0 Features Latest Wellness Strategies and Tech

New financial wellness coaching platform incorporates research-backed strategies and technology to help employees set and achieve financial goals. 
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After a 10 month product and research collaboration with Duke University’s Common Cents Lab, Retiremap is relaunching its financial wellness platform under the moniker Retiremap 2.0.

The new vision of Retiremap is “based on a close collaboration with renowned behavioral economist, New York Times bestselling author, Wall Street Journal columnist and James B. Duke Professor of Behavioral Economics at Duke University, Dan Ariely.”

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“We usually think that the best cure for bad financial decisions is financial literacy. Just teach people, and all will be solved. Sadly this is not the case, and even worse, the evidence is that financial literacy’s effectiveness is close to zero,” Ariely suggests. “What we need is a system that takes the complexity of financial decision making, breaks it into actionable components, and coaches us on taking one step at a time. This is what Retiremap is designed to do.”

Retiremap 2.0 is more than a financial wellness program, according to the firm: “It is a technology platform that works to improve financial well-being using key insights from the field of behavioral economics. [The program] uses employees’ data to deeply personalize their path to financial wellness, while automating and scaling many of the most impactful aspects of adviser-employee interactions, including confidence-building, trust and the perception of value. Additionally, in the situations where it makes sense, employees can easily connect live with their retirement plan adviser through any number of channels.”

Retiremap 2.0 will be made available to a limited group of retirement plan advisory firms.  The selection process will be announced during a September 22nd webinar. In addition to exclusive access to Retiremap 2.0, selected firms will be able to demonstrate financial wellness thought leadership with exclusive access to some of Duke and Retiremap’s key research findings. 

Data & Research September 8, 2016

Consistent 401(k) Savers More Likely to Reach Savings Goal

"By studying the experience of workers who participate consistently across several years, this study shows more accurately the extent to which steady, paycheck-by-paycheck saving and compounding investment returns can help workers accumulate a sizable retirement nest egg,” says Sarah Holden with ICI.
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The average 401(k) plan account balance of workers who participated consistently in one 401(k) plan increased significantly over the four-year period ending at year-end 2014, according to data published by the Employee Benefit Research Institute (EBRI) and the Investment Company Institute (ICI).

The study, “What Does Consistent Participation in 401(k) Plans Generate? Changes in 401(k) Account Balances, 2010–2014,” examines the accounts of about 8.8 million “consistent participants”—those who remained active in the same 401(k) plan for the four-year period covering year-end 2010 through year-end 2014. It finds that average account balances increased during this period for consistent participants in all age cohorts. This growth reflects contributions of employers and workers, in addition to investment returns, withdrawals, and loans.

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“Looking at average balances for all 401(k) accounts does not reflect the system’s full potential for workers building their retirement resources,” says Sarah Holden, ICI’s senior director of retirement and investor research. “By studying the experience of workers who participate consistently across several years, this study shows more accurately the extent to which steady, paycheck-by-paycheck saving and compounding investment returns can help workers accumulate a sizable retirement nest egg.”

The study’s analysis of the millions of accounts that remained in the EBRI/ICI database for an extended period gives a truer picture of the accumulation potential of 401(k)s than an analysis focused on the average account balances of all 24.9 million participants in the database. This is because 401(k) participants enter and leave the database as they change jobs or retire, and plan sponsors enter and leave the database as they change recordkeepers.

The average 401(k) plan account balance of the consistent participants grew at a compound annual average rate of 15.5%, from 2010 through year-end 2014, to $130,493. This level exceeded the average account balance among all participants in the EBRI/ICI 401(k) database, reflecting the higher age and tenure of the consistent group, and the ability to track an extended period of ongoing participation.

The median 401(k) plan account balance for consistent participants increased at a compound annual average growth rate of 19.7% between 2010 and year-end 2014, to $56,653—more than three times the median balance of all participant accounts in the EBRI/ICI database.

Nearly one in five (19.5%) of the consistent participants had more than $200,000 in their 401(k) plan accounts at their current employers, while another 16.1% had accumulated between $100,000 and $200,000.

The study also found in the consistent participant analysis, as in EBRI/ICI’s broader cross-sectional analysis, about two-thirds of 401(k) participants’ assets were invested in equities at year-end 2014—whether through equity funds, the equity portion of target-date and non–target-date balanced funds, or company stock.

The full analysis is being published simultaneously in the September 2016 issues of EBRI Issue Brief and ICI Research Perspective.

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