Rick Irace Discusses the Importance of Education to Help Close Retirement Savings Gap

In a recent PLANSPONSOR feature, Rick Irace, COO for our Retirement division, shares insights from Ascensus’ Retirement Outlook Tool and discusses employers’ opportunity to close the education gap on retirement planning. In 2018, 19% of Ascensus plan participants who used this tool found that they were on track to meet their savings goals. To help address this readiness issue, “plan sponsors should focus on educating employees on the fundamentals of their plan,” states Irace. “For younger generations of employees, many plan sponsors and financial advisers also find it useful to highlight why it makes sense to start saving now, even if it’s at a very modest rate.”

Our data suggests that simply being more engaged with their retirement account website is correlated to higher savings outcomes for participants. “A saver who logged into our participant website at least once in 2019 shows an average 401(k) account balance 25% higher than a saver who has not logged in since 2018, 46% higher than one who has not logged on since 2017, and 67% higher than one who has not logged on since 2017,” he added.