The mobile technology retirement space is heating up, with three major retirement plan providers launching new apps in recent months.
Vanguard has introduced new mobile apps and text messaging campaigns to communicate with participants in their 401(k) retirement plans. Vanguard developers also hope the new tools will improve retirement readiness across its investor population by making investment processes simpler and the ability to save for retirement more accessible to novice investors.
Transamerica launched its Retirement Outlook Estimator, a mobile app that estimates the probability and likelihood of the user reaching their retirement savings goals, based on information input by the user. The app - available to the general public, not just Transamerica customers - calculates outlooks based on a spectrum of retirement savings information, including retirement account balances, contribution rates, investment style, and other retirement income sources. It also incorporates a social security income estimate directly into the user's retirement outlook. Information entered on the mobile device is saved, allowing users to edit their goals and savings whenever they would like and provides for a continuously updated retirement outlook.
Fidelity Investments, meanwhile, introduced its NetBenefits smartphone app last spring. The app provides users a view of their workplace plan managed by Fidelity and also enables participants to access their personal investing accounts held with the firm.
Vanguard developed its text messaging outreach "in response to participants' desire to know where things were in the investment process," says Amy Cribbs, head of Vanguard Participant Experience.
Based on internal data, it learned that many people used the call centers to track retirement transactions. So the firm introduced the text-messaging tool as a way for participants to confirm that their paperwork was received, for example. Basically, the text messages function as a UPS-like tracker.
Cribbs and her team are currently looking into using text-messaging campaigns for experience-related functions as well. For example, the firm may begin sending texts to remind employees to increase their contribution if they are not taking advantage of their company match.
But Vanguard developers are striving to find the balance between useful and non-harassing applications for mobile technology. They want to provide tools that increase engagement and help participants make better investment decisions without turning mployees' inboxes into today's mailboxes that are typically stuffed with junk mail.
Cribbs acknowledges that people are reticent to spend time on retirement issues because the process seems complicated. Tools like these use the knowledge of the participant and their plan to shape simple decisions in seconds.
"We're trying to address the natural tendency of the majority, [by showing them] how they can improve their outcomes easily and make it frictionless," she explains. "We're looking for more tactics that nudge participants toward the right behaviors."
As of May 2013, nearly 20% of Vanguard's online interactions with retirement plan participants came from a mobile device, compared to 4% in January 2011.
