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Talking Walls

A Glimpse Inside our Recent Conversations with Plan Participants

Phyllis Klein Senior
Director | CAPTRUST Head of Professional Services

CAPTRUST has always taken an interest in the people who are trying to balance the economies of managing their life while saving for retirement: namely, plan participants. So far this year, we have met with over 8,800 participants across the country, including over 2,300 one-on-one meetings. And we never stop learning from the conversations we have. Given all that has happened over the past couple of years, we thought it might be interesting to share some of our insights gathered from the individuals we have spoken with most recently.

Not surprisingly, we hear the same three main questions during almost every individual participant meeting:
• Am I saving enough?
• Am I invested correctly?
• Am I on track for retirement? In other words, will I be OK?
In addition to these frequent questions, participant discussions about retirement savings definitely have a life-cycle aspect — with a range of concerns and issues that vary by age group.
Likely the most notable change in tone comes from younger savers, who expect access to a retirement plan but, at the same time, are skeptical about the stock market. Conversations are centered on the budgets they are trying to establish against key financial goals, including paying off college loans or other accumulated debt. This group is not used to handling financial decisions for themselves and may even ask to have their parents involved in our discussions with them. This attitude seems to have made the younger cohort comfortable with plan features such as auto-enrollment.
Here are a few interesting observations from our interactions with savers in their 20s:
• This group saw parents suffer large losses during 2002 and 2008 and have been affected by those events.
• They are much more comfortable in individual or smallgroup discussions and disdain in large-group sessions.
• They rely heavily on the internet, their peers, or social media for information—making paper materials, like enrollment books, less eff ective.
• Frequently asked questions include: How much is the match? What investment options should I pick? What happens when I leave this job?
Participants in their 30s also have a distinct identity. I recently attended an Employee Benefit Research Institute sponsored retirement policy discussion in Washington, D.C., that provided insight into this unique group. The meeting was focused on U.S. retirement security, including the ability for people to accumulate adequate savings. Some of the conference content focused on the notion that retirement savings timeframes are shrinking. We see this issue affecting the “young family” savers through the discussions we are having with this group.
As individuals choose to marry later and may not start families until their early 30s, this group struggles with carving out adequate retirement savings. As a result, they are losing saving years due to other economic demands. Advice typically concerns how to increase savings gradually over time, how much savings is enough, and reiterating the need for continuous saving. The shortened retirement saving time horizon will have a long-term impact on these participants and their ability to accumulate enough money for retirement. 
We are having similar conversations with people in their 40s and are starting to see an increase in questions about how an individual’s account balance compares with co-workers’. As previously mentioned, because people are marrying and having children later than previous generations, those in their mid-40s regularly have children preparing for college and other money demands that interfere with retirement savings. Conversations with this group are often directed toward how much retirement income their account balance might provide and how an increase in savings may help make up for lost time.
Employees in their 50s provide an interesting conundrum. Many surveys claim this group wants to work past normal retirement age, but our interactions suggest otherwise. Most of the people we see plan to retire on time or even early. Perhaps we are meeting with individuals who have taken an active interest in saving; nonetheless, our experience coincides closely with what we see from the Bureau of Labor Statistics, where less than 20% of people are reported to be working past their normal retirement age. However, the same data shows that the group of workers over age 65 continues to expand and is expected to increase with the onslaught of the baby boomers. We often are asked by this age group for help with diversification and advice on how to protect their money. These employees are beginning to craft their desired retirement experience and want to understand if they are saving enough to meet their needs.
Finally, those who are close to retirement, in the 60-plus age group, often have already talked to a financial advisor, since many in this demographic have accumulated retirement dollars with rollover potential. Often those in this age group do not understand what type of income level their account balances may provide, so we spend time discussing longevity, income, and spending patterns. Since home ownership is a key variable for this group, we find ourselves discussing the need to pay off debt before going onto a fixed income in retirement.
While the nature of the conversation varies from one individual to another, participant advice is very much in demand across all economic and age groups. As advisors we find the kind of “feet on the street” insights we receive from these meetings to be very valuable and rewarding. As always, we will continue to use what clients are asking us to help create relevant solutions for employees working toward a successful retirement.