One of my favorite times of the year is coming: the New Year. Or more specifically, right after the New Year. Once festivities and events have passed and life returns to somewhat of a normal pace, it is the perfect opportunity to stop and reflect on the previous year. Success and failure, cause and effect juxtaposed into one year.
This reflection period can go on for a little while until the inevitable resolution period comes. This year, that resolution moment came one brisk morning when I was looking in the mirror and thinking how I should play more tennis. My wife’s too-enthusiastic agreement told me it was time to get back to work.
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Most resolutions I hear involve self-improvement in some fashion (I can practically hear the collective groan of readers thinking of their inboxes filled with gym advertisements). As advisers and plan sponsors, however, we are in a unique position to resolve ourselves to help those around us in a very real, measurable way. Improving the retirement plans that we run and advise will have a positive impact on our participants’ retirement readiness — and ultimately their retirement experience.
The following are five simple, yet effective, steps to consider in retirement plan improvement:
1) Set goals. Why do so many people declare that they are going to start going to the gym, only to fizzle out after a few weeks? They didn’t set reasonable goals. Retirement planning is a long, complex process that only works in the context of the end goal. Set goals for yourself throughout the year, but make them reasonable. You can’t solve every problem overnight.
2) Identify problem areas. In the larger context of improving our retirement plans, we set smaller, achievable goals, which are generated by specific problem areas. Participation a problem? There’s an answer for that. In fact, there are quite a few answers.
3) Plot the path in a measurable way. To continue with the example of participation as a problem area, there are a number of approaches to improvement. These range from education initiatives to plan design changes. Whichever route you take, understand what success looks like and how to measure it. Participation is an easy example as it’s measured by percentage. Qualitative factors, such as participant investment knowledge and sophistication, are obviously harder to measure.
4) Roll with the punches. Just as our gym-quitting friends took on too much to handle, sometimes the chosen strategy doesn’t achieve the desired results. In this case, the right move is to adjust and move to the next attempt. If our education strategy to improve participation fell flat, then perhaps auto-enrollment is the next move.
5) Reflect on the process. Everything comes full circle. What went wrong? What went right? More importantly: What did you learn about your participants’ needs and desires?
Rinse and repeat. This process allows us to reflect on and understand the past while solving for the future. In life and in planning, always resolve for the future.
Ludwig, ChFC, AIF, CRPS, is an LPL Financial adviser with LHD Retirement. Reach him at
This information was developed as a general guide to educate plan sponsors, but is not intended as authoritative guidance or tax or legal advice. Each plan has unique requirements, and you should consult your attorney or tax adviser for guidance on your specific situation. In no way does adviser assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations.
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