Confidence Is More Effective Than Education in Retirement Planning
The retirement industry spends millions of dollars each year to increase participant knowledge in an effort to drive plan enrollment and engagement. A groundbreaking new study proves that participant confidence, not knowledge, is what’s needed to overcome inertia. vWise SmartPlan is a proprietary online application that guides employees to take action on their retirement plan. SmartPlan uses interactive multimedia to educate users on the features of their plan, to discover their individual retirement needs, to enroll them in their plan, to set their deferral rates, and to help them select investments.
In early 2015 vWise Inc., the developer of SmartPlan, commissioned an independent study to understand SmartPlan’s ability to confront two of the biggest challenges in retirement planning—increasing plan enrollment and deferrals. Testing was conducted to determine how engaged plan participants are in their retirement. The survey pool was categorized as approximately 30% Active Participants and 70% Non-Participants. A Retirement Readiness Confidence (RRC) Scale was created to measure how confident participants are in their ability to successfully plan for retirement. A segment of the Non-Participants was asked to use SmartPlan to determine if the application impacted their RRC scores.
After just one SmartPlan session, users who were eligible and had never before participated in their retirement plan had the same confidence and interaction with their plan as those who were actively participating and investing. The boost in confidence created by SmartPlan, combined with a call-to-action when participant confidence was at its peak, empowered Non-Participants to engage with and enroll in their retirement plan. Increasing Confidence Increases Plan Participation Getting participants to boost their retirement plan participation and contribution levels does not result from increasing their knowledge. It is the increase in their confidence that enables participants to overcome fear and inertia, to enroll in their retirement program, and to engage in planning their future. SmartPlan’s scientifically designed, personalized experience instills that confidence.
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