Retirement Readiness – First Step? Pick Up a Pen – New research from Schwab on successful habits for retirement readiness and preparation deduced that putting their plans in writing was a game changer for 401(k) savers. In fact, more than half — 54% — of 401(k) plan participants who wrote down their plans increased their contributions in the past year, compared to 33 percent, who didn’t put pen to paper.
In addition, half of those with written plans rebalanced their 401(k) allocation, while only 24% without them did.
According to Schwab, retirement savers who write down their goals are more likely to be confident and engaged, and therefore, exhibit more positive savings and investing behaviors than their counterparts without written plans. However, Schwab’s survey on retirement readiness found that only 24% of Americans actually put their financial plans in writing.
As an employer, you can potentially move the needle in a positive direction on retirement readiness by encouraging employees to write down their financial goals. Considering centering a communication campaign or series of meetings around how to formulate financial goals and achieve them. Emphasize that these goals are more likely to come to fruition if they’re written down.
There’s a scientific explanation behind why writing down your goals is more likely to create results rather than just thinking about them. The short answer is that the simple act of putting pen to paper triggers specific parts of the brain to fire and translate those thoughts into actions. It may sound a bit new-agey and “woo woo” to some, but research proves that putting your goals in writing is effective in helping you achieve what you want – retirement readiness.
It’s also important to communicate to employees that they must be specific when penning their goals. So instead of writing “I will save more money for retirement this year,” they should write “I will save 6% of my salary in my 401(k) this year.”
For employees thinking about starting to save or increasing their retirement plan contributions, or for those considering modifying their investment strategies or rebalancing their portfolios, the simple act of writing down their goals might just be what spurs them to take action.
