We will all retire someday. That may be tomorrow, or it might be in 20, 30 or 40 years. But the same question applies to us all: Are we prepared for retirement; do we know how much we need to save?
Many people can’t answer that question. According to a recent survey about retirement readiness from Bank of America Merrill Lynch, 81 percent of Americans said they don't know how much money they'll need to fund their golden years. That is a scary fact! The truth is that understanding how to plan and prepare adequately for retirement is far from simple. And its inherent complexity means it’s the type of activity that people tend to push to the next day, and the day after that … Procrastination steals not only time, but the ability to maximize savings to be used during retirement.
In a world where we’re accustomed to being able to pretty much do whatever we want instantly with the devices we carry around in our pockets, the only thing that we cannot prepare for is our retiring life.
According to the Pew Center, 80 percent of US residents 65 years and older have a cell phone of some kind and 42 percent have a smartphone. But in the 50- to 64-years-old age group, 93 percent have a cell phone and 74 percent a smartphone—a trend expected to increase annually. Mobile technology has penetrated every single aspect of our lives. It’s changing industries, creating new ones and eliminating others. Being mobile is not simply nice to have. It’s part of your everyday life.
What’s more, research also shows that citizens expect to have digital experiences in their preferred channels from every service provider that they engage with—including pension organizations. More than six out of 10 US citizens want more ways to engage with their pension organization and 72 percent want a retirement mobile application. The pensions industry MUST innovate to become as relevant as the private sector is to the very same customers. In the State of New York, for example, more than 2 million people receive or will receive some form of a public -service pension. What are their expectations of service? The same as they are from Amazon Prime: relevant, personalized and easy to use.
The need to meet those expectations applies to all pensions organizations. That means acting as a financial “coach,” helping members to take a holistic view of their retirement and the planning they need to undertake to achieve an adequate level of benefits. How can they do that? By looking at different providers and partnering with them to bring innovation.
In the United States a business called Acorns uses a simple app that enables its users to save every time they make a purchase with their credit cards, by rounding up to the nearest dollar. That’s just one example of many possibilities. Examples of financial innovation are springing up everywhere, and pension organizations are ideally placed to help their members, you and me, understand and take advantage of the possibilities. “Coaching” options for members (while not providing financial services) can still help to address the issues of benefit adequacy.
We are all concerned about our retirement plans. Some of us may just be at the start of our careers and need to understand how to prepare. Some of us might be closer to retiring and others might already have retired. So, tell me, would you like to be coached about planning for your retirement? Would you use a retirement app that allows you to manage your plan from your mobile phone at a time and place convenient for you?
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See this post on LinkedIn: How’s your retirement plan looking?