Voya Urges ‘Born to Save’ Mentality

It’s a trite-but-true piece of retirement planning advice: consciously consider your nonessential expenses and you’ll be surprised what you could save.

Voya Financial says it will offer every baby born today a $500 mutual fund investment to mark the company’s second annual Born to Save campaign—and the first day of National Save for Retirement Week.

Alongside the offer of a $500 mutual fund investment, Voya is highlighting research showing 40% of new parents admit to spending at least this amount on “nonessential baby items.” In a recent survey of more than 1,000 new parents, Voya found that roughly four-in-10 spent at least $500 on baby-related items in the first year “that they later determined were nonessential or they never used.” At the same time, Voya says 20% of the moms and dads spent over $1,000 on these unnecessary items.

According to James Nichols, Voya’s head of retirement income and advice strategy, the firm hopes the campaign will push more people to consider how small amounts of money can be invested during day-to-day life to build a secure financial future.

Nichols tells PLANADVISER that Voya also found that a majority of this overspending “went to clothing, toys and baby entertainment,” while approximately one in five unessential dollars went to upgraded strollers, baby carriers and accessories. He says a similar amount also went to expensive nursery furniture and décor.

“The goal [of Born to Save] is to get people to start early and consider the real power of small-but-regular investments made over a lifetime,” he says. “We want to encourage all Americans to think differently about how they can prepare for retirement.”

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Voya’s research cites U.S. Census data showing more than 10,000 babies are born each day in this country, while approximately 10,000 Baby Boomers turn 65 every day. The trends are expected to last at least for the next 15 years, Nichols says.

The research goes on to argue families just starting out and those for whom retirement is pending can benefit by cutting back on the more expensive items, and by setting and sticking to a formal written budget. “Making sure to pay your retirement plan first” is another key piece of advice for those with access to a 401(k) plan or an individual retirement account (IRA) at work, Nichols adds. The unifying goal for Americans of all ages is to make regular contributions to savings and investments whenever possible, no matter how large or small.

Nichols says Voya will also “reinforce the benefits of consistent saving” by giving each Born to Save program participant who joined in the initial 2014 class an additional $50 investment.  

“We think this birthday gift is a great reminder that saving for retirement requires regular attention, planning and contributions,” notes Charlie Nelson, CEO of Retirement for Voya Financial. “While the realities of life can get in the way—especially for new parents during the early years—we encourage everyone to find simple ways to make saving a priority.”

Information on registering for the program is at http://voya.com/borntosave. Parents and guardians of eligible babies must register for this offer by December 18, 2015.