« Back | Press release: May 13, 2014
Comparison to top saving peers inspires workers to increase retirement savings, Putnam Investments analysis finds
Early Results of Putnam "How Do I Compare" Feature Show Users Dramatically Increasing 401(k) Savings
BOSTON, May 13, 2014 — Putnam Investments today released preliminary results from an analysis of its new "How Do I Compare" feature, which enables participants in Putnam-administered 401(k) plans to compare their progress in saving for retirement with the top savers in their peer group. Early results over the past month were based on nearly 10,000 workers who have used the feature to evaluate their progress in saving for retirement found that social comparison had a sizeable, 28 percent lift in deferral rates from 7.5 percent to 9.6 percent.
Launched last month, the new "How Do I Compare" feature is integrated into Putnam's Lifetime IncomeSM Analysis Tool (LIAT), which projects workers' current savings into estimated future monthly income and offers actionable steps to potentially improve outcome in retirement. The social comparison component enables workers to measure their estimated future monthly income trajectory against their peer averages — based on several criteria, including age, salary and gender — as well as to the top 10 percent of savers in each category. Initial data of the peer feature indicates a participant deferral boost even beyond the positive increase shown by participants who used the firm's core LIAT experience.
"We recognize that it is human nature to want to know how you stack up with those who save the most and have tried to harness this engrained behavior to help motivate and drive positive action when it comes to retirement savings," said Edmund F. Murphy III, Head of Defined Contribution, Putnam Investments. "Our initial results point to the power of social comparison in providing workers with an incentive to raise their own deferral rates."
The "How Do I Compare" social comparison feature works in combination with several elements already incorporated in the Putnam Lifetime Income Analysis Tool, including the firm's Health Cost Estimator and its Financial Wellness tool. Over the last month, 20% of Putnam plan participants accessing the Putnam LIAT experience made direct use of the social comparison tool.
"We are focused on providing our participants with an enhanced experience that makes it easier for workers to gauge their progress towards pursuing their retirement goals and take immediate steps to change their retirement savings rates as needed," said Murphy. "Our ultimate objective is to help plan sponsors and their participants reach their goals in a meaningful way." said Murphy.
Putnam Lifetime Income Analysis Tool
Introduced in January 2010, Putnam's Lifetime IncomeSM Analysis Tool changed the lens through which 401(k) plan participants view their current retirement savings activities, emphasizing not simply asset accumulation but actual future monthly income needs and shortfall planning. The online experience is intended to help defined contribution plan participants estimate how much monthly income their current retirement savings could generate in retirement compared to what they may need, and then offer actionable steps to help improve their prospects.
Putnam Health Cost Estimator
The Putnam Health Cost Estimator, launched in the spring of 2013, provides 401(k) plan participants with a personalized assessment of how much of their expected future monthly income is likely to be needed to cover their healthcare costs at different ages in retirement, including itemized insights on medical, dental and pharmaceutical expenses. The projections are generated from individual participant data and cost models using proprietary, actuarial-based guidelines and are shown as monthly costs, providing workers with easy-to-understand information that can help them to address potential savings shortfalls.
About Putnam Investments
Founded in 1937, Putnam Investments is a leading global money management firm with over 75 years of investment experience. In February 2014, for the third time in five years, the firm was named one of the top two mutual fund families by Lipper/Barron's based on the firm's performance across asset classes in the previous year. In 2014, Putnam also was ranked #2 out of 55 fund families for its performance over the past five years. At the end of April 2014, Putnam had $153 billion in assets under management. Putnam has offices in Boston, London, Frankfurt, Beijing, Amsterdam, Tokyo, Singapore and Sydney. For more information, visit http://www.putnam.com.
About Putnam Investments
Founded in 1937, Putnam Investments is a leading global money management firm with over 75 years of investment experience. In February 2014, for the third time in five years, the firm was named one of the top two mutual fund families by Lipper/Barron's based on the firm's performance across asset classes in the previous year. In 2014, Putnam also was ranked #2 out of 55 fund families for its performance over the past five years. At the end of December 2013, Putnam had $150 billion in assets under management. Putnam has offices in Boston, London, Frankfurt, Beijing, Amsterdam, Tokyo, Singapore and Sydney. For more information, visit http://www.putnam.com.
Investors should carefully consider the investment objectives, risks, charges, and expenses of a fund before investing. For a prospectus, or a summary prospectus if available, containing this and other information for any Putnam fund or product, call your financial representative or call Putnam at 1-800-225-1581. Please read the prospectus carefully before investing.