Sav­ing money for old age? Just learn to play the game

Em­ploy­ers go­ing through a fresh push to make re­tire­ment plan­ning more fun

San Francisco Chronicle Late Edition - - BUSINESS REPORT - By El­iz­a­beth Har­ris

When Gabi Stack imag­ines her­self at 75, she pic­tures a life that ideally in­cludes a move to Ger­many, lots of travel and am­ple time for lin­ger­ing at cafes with friends.

So she was star­tled when she re­ceived a dig­i­tally “aged” image of her­self that didn’t match her self­im­age of an ac­tive, in­de­pen­dent per­son.

“I truly hope I don’t look like the pic­ture,” she said, not­ing ex­tra wrin­kles creas­ing her fore­head and a “fat­ter” face. “I’ll find out in 20 years if I look like that.”

The image was cre­ated at an em­ployee ben­e­fits fair on Maui, in Hawaii, us­ing an app called AgingBooth. The idea is to get em­ploy­ees to think more con­cretely about their fu­ture, older selves — and mo­ti­vate them to make fi­nan­cial plans.

Stack, now a 55-year-old men­tal health care co­or­di­na­tor for the state of Hawaii, vol­un­teered as a lark with Pru­den­tial Fi­nan­cial, her re­tire­ment plan ad­min­is­tra­tor.

De­spite the shock of the photo, Stack still thought tak­ing it was fun. And that re­ac­tion is pre­cisely what many em­ploy­ers and re­tire­ment plan spon­sors are aim­ing for, with new tac­tics to en­tice work­ers into plan­ning for re­tire­ment — a task al­most univer­sally ac­knowl­edged as un­pleas­ant. Em­ploy­ers are lur­ing their work­ers with new tech­niques like ap­ply­ing com­puter pro­grams to ar­ti­fi­cially age pho­tos and us­ing games and quizzes to en­gage them on re­tire­ment and fi­nan­cial top­ics.

Brian Moto, chair­man of the board for the state of Hawaii De­ferred Com­pen­sa­tion Plan, which helped or­ga­nize the ben­e­fits fair,

said AgingBooth could be off-putting, but could be use­ful even for those who watched from a dis­tance. “Some of them cau­tiously say, as I did, ‘Oh, no, thank you, I re­ally don’t want to see my­self,’ ” Moto said. “For a lot of peo­ple, ag­ing is some­thing se­ri­ous — it’s not al­ways easy ei­ther to ac­cept or deal with, but at least we got them to think and pause.”

Some em­ploy­ers are re­port­ing greater suc­cess at reach­ing their work­ers us­ing games and quizzes rather than more tra­di­tional brochures and spread­sheets. With this in mind, the re­tire­ment plan provider and in­vest­ment firm TIAA cre­ated a com­pe­ti­tion for its clients, Square Up Your Sav­ings and Fi­nan­cial IQ, held at more than 7,000 plan par­tic­i­pant of­fices around the coun­try.

For one game in par­tic­u­lar, men and Mil­len­nial play­ers ap­peared es­pe­cially mo­ti­vated by com­pe­ti­tion, with men log­ging 40 per­cent and Mil­len­ni­als 50 per­cent more clicks on their rank­ings than other de­mo­graphic groups, ac­cord­ing to TIAA. Mil­len­nial em­ploy­ees, too, showed greater in­ter­est in the games than older work­ers did — in one in­stance, em­ploy­ees 24 to 34 years old rep­re­sented the high­est num­ber of re­peat users, log­ging eight quizzes per player, the com­pany said.

Stephanie Maksymiw is one of those avid play­ers. Among the first to take TIAA’s quiz, she un­der­stood the dif­fer­ence be­tween stocks and bonds and was con­fi­dent her knowl­edge about in­vest­ing would help her ace the fi­nan­cial ques­tions in the on­line com­pe­ti­tion held at her work­place, SRC Inc. But to her sur­prise, when she took the quiz for the first time, the re­sults re­vealed big gaps in her un­der­stand­ing, like the def­i­ni­tions of bear and bull mar­kets. De­ter­mined to im­prove her score, Maksymiw played ev­ery day for three weeks, ul­ti­mately get­ting an “above aver­age” rank­ing com­pared with her col­leagues.

“It was com­pet­i­tive,” said Maksymiw, 37, a qual­ity sys­tems an­a­lyst at SRC, a mil­i­tary re­search non­profit based in Syra­cuse, N.Y., about how she and her co-work­ers tracked their rank­ings on their re­tire­ment plan spon­sor TIAA’s pub­lic score­board.

SRC is just one of thou­sands of com­pa­nies turn­ing to on­line games to en­gage em­ploy­ees about money and re­tire­ment top­ics. Pru­den­tial cre­ated the Pro­cras­ti­na­tor Quiz to help peo­ple bet­ter iden­tify why they de­lay mak­ing im­por­tant de­ci­sions about their in­vest­ments and re­tire­ment. Voya Fi­nan­cial, for­merly ING, presents its re­tire­ment plan­ning quizzes, tools and in­for­ma­tion on a vir­tual game board that a “player” ad­vances along. Moto de­scribed an­other vi­su­al­iza­tion ex­er­cise in which at­ten­dees of ben­e­fits fairs are asked to mark the age of the old­est per­son they know on a large ver­ti­cal panel to em­pha­size the im­por­tance of plan­ning for long lives.

The stakes of th­ese ef­forts are high. A re­port pub­lished in May by the Board of Gov­er­nors of the Fed­eral Re­serve Sys­tem showed that un­der twofifths of non-re­tired Amer­i­can adults de­scribed their re­tire­ment sav­ings as on track, and one-quar­ter had no re­tire­ment sav­ings or pen­sion at all.

Pre­par­ing for re­tire­ment can be a con­fus­ing and over­whelm­ing task, and three-fifths of non­re­tirees re­ported “lit­tle or no com­fort in man­ag­ing their in­vest­ments” in self-di­rected re­tire­ment sav­ings ac­counts, ac­cord­ing to the Fed re­port, in which 12,246 peo­ple were sur­veyed. On aver­age, those sur­veyed an­swered fewer than 3 of 5 ba­sic fi­nan­cial lit­er­acy ques­tions cor­rectly.

While there is some ques­tion about the ef­fi­cacy of ed­u­ca­tion alone to im­prove fi­nan­cial de­ci­sion-mak­ing, in­vest­ment firms be­hind the ef­forts say games can bring more peo­ple into a con­ver­sa­tion about re­tire­ment plan­ning, mak­ing it less stress­ful and dull.

David Ray, a TIAA se­nior man­ag­ing di­rec­tor, said the games’ com­pet­i­tive as­pect helped draw peo­ple in.

“It’s just hu­man na­ture” to com­pare your­self with oth­ers, he said. “The fact that we main­tain a leader board stokes those com­pet­i­tive fires even more.”

De­spite the ap­par­ent in­ter­est in games among both in­vestors and in­vest­ment firms, some re­search has cast doubt on long-term im­prove­ments in fi­nan­cial lit­er­acy. One study — con­ducted by Shawn Cole at Har­vard Busi­ness School, Anna Paul­son at the Fed­eral Re­serve Bank of Chicago and Gauri Kar­tini Shas­try at Welles­ley Col­lege — ex­am­ined the re­sults of manda­tory fi­nan­cial lit­er­acy cour­ses in schools and found “no ef­fect” on sav­ings and in­vest­ment be­hav­ior.

“What wor­ries me is peo­ple have this in­tu­ition that it’s all about in­for­ma­tion,” ac­cord­ing to Dan Ariely, the James B. Duke Pro­fes­sor of Psy­chol­ogy and Be­hav­ioral Eco­nom­ics at Duke Univer­sity. “In­for­ma­tion alone is very un­likely to help,” he said.

Other or­ga­ni­za­tions, such as the non­profit Com­mon­wealth based in Bos­ton, are aim­ing to bridge the gap be­tween think­ing and do­ing. With sup­port from the Trea­sury Depart­ment, Com­mon­wealth tested an app aimed at help­ing low­er­in­come high school stu­dents, called Ramp It Up, in which play­ers com­plete col­lege and ca­reer-readi­ness projects like cre­at­ing a fi­nan­cial aid ac­count, or search­ing for schol­ar­ships, in or­der to ad­vance in the game.

Maksymiw, for one, said the games helped her de­cide to dou­ble her con­tri­bu­tion to her com­pany’s re­tire­ment plan, and she now reads her quar­terly state­ments. Af­ter yield­ing much of the re­spon­si­bil­ity for man­ag­ing her sav­ings and in­vest­ments to her fa­ther — “he’s been do­ing that since be­fore I was born,” she said — she now says her goal is to take over more of the de­ci­sions for her own money out­side her re­tire­ment plan.

But when it comes to re­tire­ment plan­ning, some per­sis­tent neg­a­tive per­cep­tions of ag­ing may be one of the big­gest ob­sta­cles, said Ta­mara Sims, a re­search sci­en­tist with Stan­ford’s Cen­ter on Longevity. Her lat­est re­search, con­ducted with Jeanne Tsai, a pro­fes­sor in Stan­ford’s psy­chol­ogy depart­ment, demon­strates that peo­ple who fo­cus more on what they lose than what they gain show a greater re­luc­tance to think and plan for their later years.

Her sur­vey in­cluded the ques­tions: “What do you look for­ward to about be­ing 75 and older?” and “What do you dread?” Those with more neg­a­tive per­cep­tions tended to fo­cus on phys­i­cal and cog­ni­tive lim­i­ta­tions while those who looked for­ward to ag­ing em­pha­sized more life­style ben­e­fits, like so­cial con­nec­tions, fam­ily, en­joy­ing na­ture or leisure, she said.

“Your fu­ture self is an ab­stract con­cept,” Sims said. Even a sim­ple writ­ing ex­er­cise fo­cus­ing on the ways you would like to take care of an older you can help peo­ple per­ceive their fu­ture more clearly. This could help spur plan­ning for re­tire­ment, shift­ing a dis­cus­sion away from the down­sides of ag­ing to, “This isn’t a scary, fright­en­ing thing but this is some­thing I look for­ward to,” she said.

Anna Kim / New York Times

Jeanne Kanai of Pru­den­tial Fi­nan­cial demon­strates the AgingBooth app at a ben­e­fits fair for State of Hawaii em­ploy­ees on Maui. Some apps are mo­ti­vat­ing work­ers to plan bet­ter for re­tire­ment.

Tony No­vak-Clif­ford / New York Times

Brian Moto of the Hawaii De­ferred Com­pen­sa­tion Plan said AgingBooth could help with some plans.

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