Retirement Planner Interfaces Are a Key Resource for Communicating Readiness Data to Participants

Preparing for retirement proves arduous for many Americans, as recordkeepers scramble to offer retirement planner interfaces that meet participants’ planning needs and UX expectations. With the uncertain future of Social Security, there is widespread worry about how future generations will fund their retirements. One of the most prominent topics within the industry is how best to discuss levels of retirement readiness with participants. For two years, Corporate Insight has covered the topic in our annual Awards Report’s Year in Review section, which highlights the biggest industry trends.

Firms are turning to retirement income projection tools as a key resource for communicating retirement readiness data to participants, as 19 of our 20 coverage set firms provide such a tool. Our latest report examines the primary retirement planner interfaces available on the participant websites of our coverage firms.

Accurate assessments of retirement readiness require that tools account for a significant range of participant information

To assess levels of retirement readiness, participants must provide complete and accurate pictures of their financial lives. To this end, every firm in this report automatically imports participant data, and 74% immediately present results so that even low-engagement users can access retirement readiness data. To ensure participants fill out inputs correctly, many retirement planners feature built-in tools like Social Security benefit estimators—provided by all firms (100%)—and budgeting worksheets (37%).

Best practices for tool inputs include:

• Automatically import data and allow participants to adjust the information as needed
• Encourage participants to engage more deeply with tools and offer additional inputs assessing things like planned retirement ages and anticipated income streams from outside sources like pensions
• Provide contextual information, like different retirement lifestyle profiles correlated with various retirement income replacement ratios

Standout interfaces communicate results in an intuitive manner that incites participants to take positive action to improve their circumstances

In terms of results, best practices involve making information intuitive and actionable. Firms can help participants assess data by offering clear visualizations—provided by all but one firm in this report (95%)—and providing peer comparison (26%) to contextualize metrics. To make resources more actionable, most firms (79%) offer contribution rate advice, and many (63%) allow users to enact rate changes within tools’ interfaces, while 37% provide both investment allocation advice and transactions.

Best practices for tool results include:

• Accommodate participants who conceptualize their financial needs in multiple ways by providing multiple result metrics, such as monthly and annual projections
• Integrate peer comparison data, such as contribution rate comparisons, within retirement planner interfaces
• Communicate metrics in even more intuitive, digestible manners by providing visual representations of data
• Increase the likelihood of action by allowing participants to model the impact that changing their portfolios would have on their retirement circumstances

Innovations and trends emerge surrounding retirement planner interfaces

Since our last report on this topic in November 2016, firms have consistently introduced new, robust retirement planners and enhanced existing ones. One firm introduced an income projection tool early in February of this year, making it the first educational resource accessible from behind the login. Another four firms completely overhauled their retirement income projection tools. All five firms’ new and upgraded tools include features that underscore some key trends when it comes to these planners.

Nearly every tool now includes dynamic modeling features that allow participants to preview the impact of portfolio changes on their retirement readiness. Of the newly introduced tools, three firms provide contribution rate modification advice, and one also offers investment allocation advice; each tool has a built-in transactional interface that lets users enact any suggested changes. Two firms let participants set parameters for automatic contribution rate increases.

Subscribers can read the full report on retirement planner interfaces on our client portal. For access, or for more competitive intelligence on the user experience that recordkeepers provide participants, check out Corporate Insight’s Retirement Plan Monitor research service offerings.