When appealing to younger workers, plan sponsors may need to frame messages in different ways.


When communicating about retirement savings, frame your message differently for various age groups.

Social Media Message:

Older workers are less likely than younger workers to be influenced by how a message is presented

Workers under the age of 35 historically have had the lowest level of participation in employer-sponsored retirement plans. When these workers get older, they will have missed opportunities for compounding that could have made it easier to build retirement assets.1

“For younger workers … retirement security lacks the urgency older workers feel,” researchers wrote in a brief published recently by the Center for Retirement Research (CRR) at Boston College. “[Younger] people tend to distance themselves from it and think about it abstractly.”

Appropriate Messaging

In other words, younger workers may have the lowest retirement plan participation and retirement savings rates, at least in part because they are not getting the right messages. To remedy that, CRR researchers designed a study that could help them determine what kind of educational messages would be most likely to have the desired effects. They took a sample population and divided it into four groups, each of which was given a different advertisement about retirement savings, with a different combination of long-term or short-term goals and concrete or abstract framing. Participants in the study were then asked a series of questions about their intended responses to the ad.

Here’s what they found. When the issue was framed in abstract terms and presented as a long-term goal, the average participant stated an intention to save nearly 18% of salary. However, when saving was presented as a short-term goal, the intended savings rate fell to just more than 9%.

On the other hand, when the issue was framed in concrete terms, participants intended to save more than 20% if the effort was presented as a short-term goal; when framed as a long-term goal, the intended savings rate dropped to about 14% of salary.

Interestingly, this distinct pattern disappeared when the researchers evaluated the responses of older workers. They found little pattern to the variations among older workers, and savings intentions did not seem to be influenced by the kinds of distinctions that characterized their younger colleagues. “Perhaps,” the authors speculated, “because their retirement is more imminent, they have already largely settled on their saving strategy, making them indifferent to the communications approach used.”

The research brief titled “How Can Employers Encourage Young Workers to Save for Retirement?” can be downloaded from Boston College’s Center for Retirement Research at crr.bc.edu.


1Source: Center for Retirement Research at Boston College, “How Can Employers Encourage Young Workers to Save for Retirement?” March 2012.

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May 2012 — This column is provided through the Financial Planning Association, the membership organization for the financial planning community, and is brought to you by D3 Financial Counselors, a local member of FPA.