Easy Ways to Spark Small Savings Boosts

Retirement plan advisers share examples of how they sparked plan participants to save a little more, from skipping expensive daily coffee and brown-bagging lunch to “forgetting” about a raise.

‘You don’t want fries with that’

So many numbers and topics in the world of retirement savings are large and off-putting to participants. World issues rock markets and investments, points out Michael Fein, managing partner of CIC Wealth Management. “I am less concerned with the macro issues,” he tells PLANADVISER. “There is always going to be a Ukraine issue or an Israel issue or a dollar issue or an oil issue. We’re more concerned with the quality of the companies you invest in.”

Also critical is the amount the participant can save, and Fein likes to use a manageable, concrete number that participants relate to easily. “You can give up the $7.82 a week right now,” he tells participants. He downplays a small amount with suggestions such as, “Don’t order fries with your lunch tomorrow. “

DIY Nails

The demographics of the client crowd can influence the kind of example to use, says Ellen Lander, principal at Renaissance Benefit Advisors Group. “I always try to make it relatable,” she tells PLANADVISER. “If it’s a bunch of younger girls who I note have great nails, I suggest doing their nails at home.”

Skipping the daily Starbucks run is not an example that speaks to everyone, Lander feels. “Starbucks can seem very elitist, and with a more blue collar crowd, I do not use it. The safest is bringing in your lunch versus going out. Eating is universal, and everyone does it.”

Pack of Smokes

Jason Chepenik, managing principal of Chepenik Financial, says he deals with a high number of workers involved in distribution and labor. “There are a lot of smokers,” he says. “You have to know your audience.” For a law firm, Starbucks might work, but with the warehouse crew, much better examples are a pack of smokes or a six pack of beer. “Not a pack of cigarettes,” he says. “Pack of smokes. Use relevant language so you connect with them.”

Brown Bag It

As part of National Save for Retirement Week, the nonprofit ICMA-RC is sponsoring “National Pack-a-Sack Lunch Day” on Wednesday, October 22. The one-day event encourages employees to pack a brown bag lunch. The provider’s online resource shows the potentially big impact of small-but-recurring financial changes.

“Once you start saving, it becomes even easier to make small increases with your savings allocation,” Christine Marcks, president of Prudential Retirement, told PLANADVISER. She suggests participants could even use a salary increase as a relatively painless way to increase their contribution rate. “The impact is often barely noticeable in your paycheck, but it could really make a big impact on your retirement savings over time.”