Is your 401(k) looking out for you?

Is your 401(k) looking out for you?


Recently, I enjoyed dinner at a fantastic local restaurant using a gift card I had received over the holidays. My gift card covered most of the bill, so I paid for the remainder—and the tip—using my credit card. As a result, my tip appeared outrageously generous on my receipt. And it didn’t go unnoticed.

Shortly afterwards, I received an email alert from my credit card company. The friendly language made me laugh; it said something like, “We noticed that you gave an extra generous tip, and we hope it’s because your service was amazing…” They also asked for my feedback to make sure that the alert was helpful.

Bottom line, I loved the personal attention and their willingness to listen to me.

This experience also made me think in terms of the retirement industry. What if 401(k) retirement plans provided the same kind of service to participants? And what should that look like?

Retirement services should include alerts—similar to those that my credit card company provided—to ensure that plan participants, plan sponsors, and financial advisors are all aware of plan activity and savings opportunities. Alerts should be sent whenever something happens that could affect the health of the account. And according to a recent study conducted by the Aegon Center for Longevity and Retirement, workers who have a written retirement strategy in place are significantly more likely to turn their good savings intentions into actions [1].

Timely alerts providing useful and actionable information could go a long way in helping plan participants create a better plan for their retirement income. Just like my credit card company provides transparency into my spending habits, retirement service should give the same kind of insights into 401(k) participation—and more importantly, retirement readiness.