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Beyond the Numbers    Financial Advisor eNewsletter

how to motivate your clients to save and invest for retirement


Many of your clients likely recognize they should be saving and investing more for retirement. But helping motivate your clients to focus on their retirement plans and save more can be a challenge. A secret experiment hidden within a study conducted by the Capital Group revealed what may be a surprisingly effective strategy: If people envision their what their lives in retirement could be, they are motivated to save significantly more.


In the study, which included a survey of 1,202 Millennials, Gen Xers, and Boomers, half of the survey respondents were asked to envision what kind retirement lifestyle was most appealing to them before determining how much savings they should set aside for retirement. The other half were only asked how much they thought they should save for retirement.


The result: Survey participants who were asked to visualize their retirement years recommended saving 31% more per paycheck in a retirement savings plan than those who were not asked to think about their retirement lives and lifestyles.


For women and Millennials, the result was even more pronounced. Millennials who visualize their retirement target savings that are 52% higher. For women, the difference was 42%.


The key takeaway – guiding your clients to think about their retirement can help motivate them to develop a financial plan and save and invest more effectively.

Moreover, helping your clients develop a vision for what they want to do and how they want to live in retirement is ultimately be the best way to identify spending needs and develop a financial plan that won’t fall short of your clients’ goals and expectations. And, when working with a couple, exploring their visions for retirement together will help align goals and ensure their retirement plan is addressing the retirement hopes, priorities, and worries of both spouses/partners.

Visualizing retirement is an important first step in retirement planning because retirement means so many different things to different clients. For prior generations, retirement largely meant rest and relaxation. Today, planning for retirement can mean rethinking the purpose of our retirement years, where we might live, what new activities we might explore, how we might continue to learn, work, and give back, the roles we want to play in our grandchildren’s lives, and how we can fund our dreams and protect ourselves from our greatest worries. Helping your clients think about their lives is also a way to build trust and deepen relationships. 


“The financial services industry sometimes accentuates worries and guilt to get people to pay more attention to planning and saving for retirement,” says Heather Lord, senior vice president and head of strategy and innovation at Capital Group. “Fear doesn’t generally work. We believe — and our survey shows — that imagining one’s later years is a powerful exercise that helps drive increased average savings per paycheck for retirement.


For the full study report, click here.

This article is a publication of Life Stage Insights, a client discovery and engagement system for financial advisors.

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