From  the thousands and thousands of pre-retirees I’ve talked to over the past decade, two consistant comments I hear over and over again are “I wish I’d started saving earlier” and “I wish I’d saved more along the way.”  Since I’ve yet to have an employee tell me they’ve saved too much for retirement, every employee could benefit from knowing the 7 essential habits of highly confident retirees that were concluded from the BlackRock 2012 Retirement Survey, which was conducted by Boston Research Group.

The survey was conducted to track beliefs and behaviors that plan participants have regarding retirement to help plan sponsors and plan providers better understand how to meet the needs of defined contribution sponsors and participants. Even though the survey by BlackRock is in it’s 4th year, this was the first time that the survey was expanded to include recent retirees.  This was an important shift since as retirement evolves, who better than a recent retiree can discuss the realities of retirement and provide guidance to your current workforce on what defines success.

Since only about 1/4 of current workers are confident they they will have enough money to live comfortably in retirement, it was a surprisingly considerable gap that recent retirees’ experience of retirement is much more positive, with more than half of retirees stating they were confident that they saved enough to live comfortably in retirement.  According to BlackRock, this gap could be caused by the “great unknown” from those who had not yet transitioned to retirement, but what was apparent were the several factors that seemed to be directly correlated with this retirement confidence:

Habit 1:  Making the most out of the savings plan available at work and being engaged as a participant by understanding how the plan works (according to 87% of survey respondents).

Habit 2:  Increasing contributions to the plan when possible, with the most confident retirees reporting they had increased their contributions after each pay raise, promotion, and bonus (according to 90% of survey respondents).

Habit 3:  Estimating retirement income by using in-plan tools and external resources to understand how their savings translated to retirement spending (according to 84% of survey respondents).

Habit 4:  Reviewing strategy on a regular basis and assessing as an all-inclusive estimate, including Social Security and their additional outside savings (according to 83% of survey respondents).

Habit 5:  Changing their investment mix as they aged and moved through their career towards retirement (according to 79% of survey respondents).

Habit 6:  Enrolling early, with a clear connection of retirement security to the tenure in their workplace savings plan (according to 77% of survey respondents).

Habit 7:  Saving the maximum, including the catch-up provision, even if it was a sacrifice to save (according to 73% of survey respondents).

So how can you help change your employees’ behavior to emulate these 7 effective habits?  Certainly auto-enrollment, auto-escalation, and having a target date fund as your QDIA (Qualified Default Investment Alternative) are all very beneficial.  But you also need to think of new ways to keep your plan top of mind with the participants.  Using the term “wealth accumulation” account instead of retirement account might get your younger workers more engaged or include an income projection on the quarterly statement to track their progress towards their income goals.

To help your employees stay more informed and make the most of their plan, incorporate guidance on the retirement plan within a broader benefits workshop or life stage financial planning session.  And most importantly, make retirement education an ongoing focus, using multiple channels of communication to engage your workforce.