Retirement plan participants who have adopted mobile technology to keep track of their account balances have higher deferral rates than those who don’t use it and are more likely to increase their contributions, according to research by The Principal.
Principal participants who use Principal Mobile have an average deferral rate 11 percent higher than the average deferral for all participants covered by plans. Almost twice as many mobile users, 15 percent, increased their savings rate vs. the overall pool of participants, 8.2 percent.
“Those signing up for the mobile app want to be more engaged with their retirement account so it’s no surprise they are also higher contributors. Seeing that account balance and tracking progress on a regular basis may be just the nudge needed to keep savings a priority,” said Joleen Workman, vice president, retirement and investor services at The Principal. “Because mobile is a great way for participants to have retirement account information at their fingertips, we’re enhancing our app so participants can not only view savings information but also increase contributions.”
The Principal has enhanced its mobile retirement savings app to target plan participants who are rapidly adopting mobile technology to keep track of their balances. According to a recent Principal Financial Group participant survey, 61 percent of participants with 401(k) plans through The Principal say they use a smartphone. With the enhancements to its mobile app, plan participants can view their current retirement contribution and change it.
“What surprises many participants is that increasing their deferral rate can possibly have a big impact on long-term savings, but a relatively low impact on their paycheck today because they use pre-tax dollars,” said Workman. “By updating our app, we’re making it easier and more convenient to help workers take steps to meet short-term and long-term savings goals.”