Vanguard Launches Behavioral Finance Retirement Portal

Tool aggregates investor assets, generates monthly retirement income

(Photo: AP) (Photo: AP)

In an effort to help investors improve their retirement preparedness, Vanguard launched a new web portal built on its Retirement Readiness Tool that employs behavioral finance research to provide savers with personalized recommendations.

(Related: How ‘New Frugality’ Influences Boomers’ Rising Retirement Optimism)

“Part of Vanguard’s core purpose is to help investors achieve retirement success, and we are continuously evolving our technology capabilities and digital communications to improve the 401(k) participant experience,” Lauren Valente, head of Participant Experience and Recordkeeping Services for the Vanguard Institutional Investor Group, said in a statement.

Valente said Vanguard’s “reiterative, test-and-learn approach” helps the firm provide tools that let retirement plan sponsors “best reach employees and help drive better retirement outcomes.”

The tool aggregates data from investors’ savings, Social Security and other assets, and projects how they will grow over time. It uses a 4% withdrawal rate to show what those projected savings will look like in monthly income.

“For many investors, retirement can be an intangible, far-off concept with loosely defined goals,” Valente said. “We leverage our methodologies and capabilities to provide participants with a clear estimate of their savings and income for their retirement years, and deliver it in a way that is comprehensive and meaningful to them. This enables them to make financial choices now that can dramatically impact their future.”

Users can adjust different variables to run what-if scenarios. The platform will provide suggestions for next steps to keep users moving toward their goals.

--- Read Young Investors, Pt. 2: Get Off the ‘Hedonic Treadmill’ on ThinkAdvisor. 

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