Voya Financial is using a new white paper by a behavioral finance expert to provide seven tips to help employers and retirement plan advisors help workers rebuild their retirement savings once the COVID-19 pandemic are over.
“The percentage of participants with a positive retirement sentiment fell by 13 points in March” last year, after the pandemic started, “from 74% to 61%,” the firm points out in “Plan design during challenging times: 7 Actionable Insights from Behavioral Finance” by Shlomo Benartzi, a senior academic advisor to the Voya Behavioral Finance Institute for Innovation and UCLA Anderson School of Management professor emeritus.
“Surveys of companies from the spring reflected a similar trendline, as approximately 20% of plans with a match said they were considering eliminating or suspending their match to cut costs,” according to the paper.
“While the outlook has since improved — 75% of participants reported a positive retirement sentiment in August — the crisis may have a lasting impact on retirement outcomes due to increased withdrawals during the COVID-19 crisis,” according to Benartzi.
The paper goes on to give Benartzi’s seven actionable insights to help turn that around.
Three of the most significant ones are: