A new wave of retirement planning tools seeks to connect employees to their 401(k) plans by tapping into their hearts rather than their heads.
Spurred by the work of behavioral economists, the tools guide employees to consider an older version of themselves.
That’s powerful, but the authors of the Mercer/Stanford study said that plan participants could simply envision their retirement as a short list of needs, and that would have the same effect.
“If you create an emotional connection, you get more of a behavioral change than with just a data base connection,” Cormier said.
A small change, Cormier said, can make a big difference.
“By matching at, say, 25 percent up to 12 percent more people” will be saving enough for their post-work years, he said.
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