Promoting Retirement Saving? Accentuate the Positive

This article is from the International Foundation of Employee Benefit Plans on August 5, 2016 and was written by Pat Bonner, Ph.D., CEBS.

Rarely does a day pass when there isn’t a news headline decrying how few people are saving for retirement, and among those who are saving, most aren’t saving enough. With all the warnings of a retirement crisis and people facing poverty in what are supposed to be our “golden years,” you would think people would be stepping up their efforts to get ready for life after work. Why aren’t people making changes in how much they spend and save?

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It turns out behavioral economists have an explanation—and a song from way back in the 1940s provides good advice on how to address the problem. I suspect that somewhere in the back of your brain is a fun little song from Johnny Mercer titled “Accentuate the Positive,” sung by Bing Crosby and the Andrew Sisters.
From behavioral economics we have learned that, contrary to what many people believe, facts and figures on bad behaviors are rarely helpful. Consider this headline:

“One in three workers has saved nothing for retirement.”

Persons who see this headline might think, “A lot of other people like me aren’t saving for retirement, so I don’t have to do anything either.” Or, perhaps, they conclude, “I’m just like everyone else and can’t afford to save money for my retirement.”When people are faced with a choice, they tend to do what most other people are doing. This is where the first three lines of the song provide such good advice for those of us in the benefits field:

You’ve got to accentuate the positive.
Eliminate the negative.
Latch on to the affirmative.

In other words, emphasize what co-workers are doing right:

“80% of ABC employees contributed to their retirement plan last year.”
“Nine of every ten new hires say ‘yes’ to saving 15% of their pay for retirement.”

The more similar the people described in a message are to those targeted (e.g., new hires, co-workers in the same building), the more likely those targeted will copy the positive behavior.While this example focuses on saving for retirement, emphasizing a desired behavior can work when trying to get people to take a variety of actions in the workplace—for example, taking advantage of a health reimbursement arrangement, participating in a fitness program or signing up for a new training program.

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