Baby boomers, millennials value technology for checking 401(k)s
Both baby boomers and millennials value the importance of technology to manage their retirement savings, but millennials outpace boomers when it comes to using IT to manage their personal finances or to support a healthy lifestyle, according to the latest Global Benefits Attitudes Survey by Willis Towers Watson.
The consulting firm surveyed 5,100 U.S. employees and found that 66% of millennials and boomers agree that mobile apps and tools are either important or very important to managing and tracking the value of their retirement savings. Fifty-nine percent of millennials also placed a high value on tools to help monitor when they will be able to retire and how much income they can expect in retirement. About 54% of boomers felt the same way.
“The fact that boomers are using technology or value technology at a level similar to millennials just goes to show how important it is for employers to be investing in that area,” says Shane Bartling, senior consultant with Willis Towers Watson in San Francisco. “I think the key thing to focus on here is not technology for technology’s sake but the value and convenience the technology delivers. Employers should be focusing more effort to ensure the quality of their technology is as strong as possible given how much value employees put on it, particularly for long-term financial planning.”
He adds that, “Many people now use technology as part of their consumer experience so expectations around technology have increased. I believe that is true for all generations. That expectation is carrying over to the retirement space as well.”
People want convenience, insights and value. The research shows that there is a big opportunity to deliver value across all generations by enhancing the quality of the technology, according to Bartling.
Generation X is strongly focused on preparing for retirement, especially those who have better short-term financial preparedness, he says. They are better able to focus on long-term savings; the ability to see retirement savings as important starts around age 40.
“For a significant portion of the workforce, retirement is the highest priority financial objective,” Bartling says.
Because technology is accessible anytime, it gives retirement plan participants the ability to access information when it is top of mind and allows them to execute on those decisions, Bartling explains. Technology also makes it easier for companies to deliver a more personalized experience.
“We’re seeing it more integrated into the financial well-being offering and tailoring the technology to address the most important needs of the individual,” Bartling says. “Certain individuals may have more pressing immediate financial needs that need to be addressed before they can begin to focus on retirement. Debt management may be a higher priority.”
Employers need to be selective about the technology they use, but finding consumer-grade technology that delivers those powerful insights and ease of use and has the ability to personalize to an individual’s situation and financial priorities is critical, he says.
“If you can help me find that hidden value, help me make decisions quickly, I will appreciate that as an employee,” he says.
Willis Towers Watson is seeing technology utilization of well over 30% annually in some of its client situations and if a modest incentive is offered, some are seeing as high as 50% utilization annually, he says.
“For one client we were able to touch two-thirds of the workforce over a three-year period using the $50 incentive approach. It challenges the thinking of what is potentially achievable in delivering financial insights, retirement savings insights to the workforce broadly. That’s a mindset that we need to recalibrate among employers,” Bartling says. “There’s great potential opportunity to deliver value, insight and drive decisions.”