Participants Need Nudge to Focus on Finances in 2016

There are actions plan advisers and their sponsor clients can take to help participants focus on budgeting and saving.


In 2016, other than faith and family, Americans have their sights set on wellness above all else according to the 7th annual New Year’s Resolution Survey from Allianz Life Insurance Company of North America.

Forty-four percent of respondents reported their top focus for 2016 will be on health/wellness, with financial stability trailing at 29% of those surveyed.

Allianz Life Vice President of Consumer Insights Katie Libbe tells PLANSPONSOR the survey didn’t ask specifically about retirement savings; however, plan sponsors can tie in their communications with employee’s New Year’s resolutions about achieving financial stability.

When asked which New Year’s resolutions they are most likely to make and actually keep, health and finances ranked almost equally. Forty-three percent of those surveyed said they are most likely to make and keep their resolution of diet/exercise, and 41% resolve to manage money better. Yet, nearly one in three respondents didn’t include financial planning in their resolutions because they “don’t make enough money to worry about it.”

“Regardless of income level, it’s imperative that people build a successful financial plan. Keep in mind that financial stability helps improve wellness overall,” says Libbe.

Aligning with their New Year’s resolutions, respondents are more open to getting help with their financial decisions despite the fact that their top focus is wellness. If given free access to professional guidance, more respondents chose a financial professional (37%) than a nutritionist/dietician (28%) or a personal trainer (23%).

“We think this is because the perceived value of a financial professional is a lot higher than other professionals, but also some people don’t qualify for professional financial advice, so the idea of free access is appealing,” Libbe says. She adds that plan sponsors and advisers need to think about how to give employees access to free or low-cost advice for retirement savings and investing.

NEXT: Addressing bad habits and debt

Respondents believe the top three things that could improve their finances in 2016 are building their savings for emergencies, paying off credit card debt and making a budget.

Respondents in this year’s survey admit to having bad financial habits to overcome, including:

  • Spending too much money on things “I don’t need” (29%);
  • Saving some money, “but not as much as I could” (28%);
  • Not saving any money (26%); and
  • Spending “more than I make” (19%).                  

“Everyone in the [retirement plan] industry is seeing that automatic enrollment really works to get employees to save, and a lot of employers are considering making the default contribution rate higher than 3%,” Libbe says. “The notion of paying yourself first resonates with employees. If employers make it easier for employees to direct part of their paychecks to savings, even if outside of the employer retirement plan, that will help.” She also suggests offering employees a way to automatically increase contributions to savings when they get salary increases.

Libbe also contends that the idea of offering student loan repayment benefits will become more popular as employers try to attract and retain Millennial employees and help them save for retirement. “Student loan debt is a constant theme in our surveys about why employees aren’t saving,” she notes.

Allianz Life Insurance Company of North America conducted the survey in November 2015, through Ipsos, with 1,006 respondents.