Do you remember those see-through coin sorters they used to give kids? You put the coin in the slot at the top and it would roll down an incline until it came upon a hole of the right size, whereupon it would drop into its designated column. First the dimes, then the pennies, then the nickels and then the quarters. It was fun to watch. We wanted more coins just to watch the mechanism work. It became a game. It was a savings game. And it worked – at least until we filled up the columns and the coins no longer dropped.
What if employees saw 401(k) plans the same way children saw those see-through coin sorters. Savings would become a game. Its mechanism would be clearly visible for them to see. They could watch what happens to their money after they put it in the slot. They could easily keep score as their money fills various buckets (as in, columns). It would become a game. It would be fun. It would encourage greater savings (at least until all the buckets were filled, but by then it would mean the employee could retire).
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We could actually do this. There are four primary drivers that control the outcome of the one's 401(k) savings (read about them here in "What Drives a 401(k) to Work So Well," FiduciaryNews.com, July 2, 2013). Each of these brings retirement savers closer to their goals. Can we figure out a way to make this a see-through savings machine? And I don't mean simply totaling the current value of the account. We all know that's too volatile a measure to be of any use.
We need a new measurement system. It needs to focus on the factors a retirement saver can control. It needs to provide positive reinforcement and psychically reward employees for correct actions. It needs to demonstrate how these correct actions work immediately to close the success gap between where the employee stands today and where the employee needs to be to live a comfortable retirement.
Most important, it needs to be a game. It needs to be fun. It needs to be addictive.
We've heard a lot of talk about gamification of this and gamification of that. Perhaps now is the time for less talk and more action.
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Christopher Carosa
Chris Carosa has been writing a weekly article and monthly column for BenefitsPRO online and BenefitsPRO Magazine since 2011 and is a nationally recognized award-winning writer, researcher and speaker. He’s written seven books, including From Cradle to Retire: The Child IRA; Hey! What’s My Number? – How to Increase the Odds You Will Retire in Comfort; A Pizza The Action: Everything I Ever Learned About Business I Learned By Working in a Pizza Stand at the Erie County Fair; and the widely acclaimed 401(k) Fiduciary Solutions. Carosa is also Chief Contributing Editor of the authoritative trade journal FiduciaryNews.com and publisher of the Mendon-Honeoye Falls-Lima Sentinel, a weekly community newspaper he founded in 1989. Currently serving as President of the National Society of Newspaper Columnists and with more than 1,000 articles published in various publications, he appears regularly in the national media. A “parallel” entrepreneur, he actively runs a handful of businesses, including a small boutique investment adviser, providing hands-on experience for his writing. A trained astrophysicist, he also holds an MBA and has been designated a Certified Trust and Financial Advisor. Share your thoughts and story ideas with him through Facebook (https://www.facebook.com/christophercarosa/)and Twitter (https://twitter.com/ChrisCarosa).
