[00:10:36] Jim Breen: But Jacque, maybe we could start with you. What are some of your thoughts about where folks are with financial literacy right now?

[00:10:43] Jacquelyn Reardon: I think one of the things that's been challenging across the board is that I think collectively we've done a really good job of reinforcing the fact that retirement, is something that you have to plan for and how lovely to see those people out in the street.

[00:10:55] Jacquelyn Reardon: Some of them are already retired, right? Like they were planning for this their whole life. What I think we're finding particularly in our research is that people, particularly younger generations, like millennial, Gen Z. Millennials have been the largest portion of the workforce for quite a while now. So we're talking about a majority of the workforce are saying, "I get it."

[00:11:12] Jacquelyn Reardon: I know I should be saving for retirement, but I have so many other financial needs before I even start to think about that. Or in addition to that, that I need help and resources on. So please help me with budgeting. Please help me with debt. I have student loan debt. I have medical debt. I think that's the piece of the puzzle from a financial literacy standpoint that Collectively, we have an opportunity to help support folks with, which is yes, retirement is a big piece of the puzzle, but let's think about it through the framework of your more holistic financial picture.

[00:11:42] Jacquelyn Reardon: And we're even seeing in our research about half of respondents, millennials are saying, I've put off other key financial milestones like retirement, like saving for retirement or buying a house because I'm so underwater with student loan debt, right? So, I think we collectively have to recognize that [00:12:00] people are not just all the same.

[00:12:02] Jacquelyn Reardon: And they're also not, they don't have just one financial milestone or priority. Again, retirement, such a big deal. We have to get it right, but people have to, we have to address all those needs that come before it.

[00:12:15] Jim Breen: These unique journeys, right? Each of us are different, right? Even the four of us sitting here, each of us could tell a unique story.

[00:12:20] Jim Breen: Compelling nonetheless, but a unique story that's special to us. And so the way in which we're going to engage retirement or anything, really, right? Could be the way in which I engage my kids in sports or food or that we eat for dinner or whatever. All of us have that different story to tell. Makes sense, right?

[00:12:38] Jim Breen: For retirement solutions, the journeys would be somewhat different as well. Chris what are your thoughts?

[00:12:43] Chris McGlynn: Yeah, no I totally agree. And I, think what Jacque, said it very well. The only thing I might add is sometimes it's not just, it's knowing the right questions to ask because sometimes you don't even know the questions, right?

[00:12:57] Chris McGlynn: And, everybody is unique. And if you don't have that foundation or you don't have the resources available to be able to go ask the right questions or have those questions presented to you, having that allows another avenue to be open completely too. And that's one of the things that has Jacque described are, is very unique and customized to each individual that in many cases causes that momentum to be lost because it's just so overwhelming.

[00:13:23] Chris McGlynn: Like, "where do I start? Where do I start?" And then once I reach a certain point. When does that start to become comfortable? Because there's so many unknowns, so many variables that go along with it. But the good news is these types of surveys and research. Helps to align a lot of that customization for each of these participants to.

[00:13:42] Jacquelyn Reardon: Can I just add something? I love what that gentleman on the street said about There's a fear factor too, right? Or a feeling of like I don't want to admit that I haven't been doing all this work all this time, or that I don't know where to start, right? So, to Chris's point about like I don't know where to start, the longer that goes on, they're also in a situation where people are like, now it's gone too long, you know, now I, now it's even weirder if I ask for help. So, demystifying that feeling and making people feel like they're supported no matter where they are in that journey.

[00:14:12] Jim Breen: Yeah. And that's so true. Qi, please, I'd love to hear your thoughts on, the discussion.

[00:14:17] Qi Sun: Yeah. I actually want to go back to what Jacque just mentioned here. I also feel, exactly the same feeling like the gentleman mentioned. And I think people sometimes are so scared to admit that.

[00:14:31] Qi Sun: I don't know about that. That make me look bad. So that's why I think from my perspective, from the research perspective, it's very important. That's exactly what we did was decoding retirement. We both measured people's subjective. perceptions about their knowledge level and also their objective knowledge level and to see whether there's a gap between these two measurements.

[00:14:58] Qi Sun: Because people, sometimes when you ask how much you know about, let's say, personal finance, people like, "oh, I need to look good, so I will tell people like, oh, I know a lot," but if we use a set of systematic quiz question, to test their financial literacy score will probably tell us a different story.

[00:15:20] Qi Sun: That's exactly what we found from the decoding retirement study. We see like a large portion of our respondents, there is a misalignment between their objective knowledge level and the subjective perceptions. And I think, to me, the group need most help, in my opinion, will be the people who are overconfident about their financial level.

[00:15:42] Qi Sun: They think they know everything, but turns out that based on their quiz score, it's not that good. And for this group of people, why I think it's most important, because first, as an industry, we need to first help them to break down, break that positive illusion about how much I know. Then you can encourage them to attend those financial education programs, those financial wellness programs.

[00:16:07] Qi Sun: Otherwise, they think, "oh, I know everything; I don't need it." Yeah. So that's, basically a very interesting finding we found from our decoding retirement study.

[00:16:16] Jim Breen: And before we follow up with what you just said, I'd love if we could run the graphic that shows the QR code.

[00:16:23] Jim Breen: And so those just joining us, Dr. Qi has recently completed a fantastic white paper called decoding retirement. And that is what we're basically unpacking here. We're, we are trying to decode retirement. And if you scan that QR code, you'll head to the landing page. You can read some of the key insights from the white paper we're talking about.

[00:16:42] Jim Breen: In addition to that, you could go ahead and download the white paper, which is live today. So there's a form on there. Go ahead, enter your information. You download that PDF and you can have a look either during while we're unpacking this together. Or after the fact and feel free to reach out to us too if you have a follow-up questions, but follow ups to what, Qi just said.

[00:17:02] Jim Breen: Very interesting, insights, especially connected to what not only we watched, but what Qi's learned in the white paper research.

[00:17:11] Jacquelyn Reardon: We found something similar to, and I love that idea of really focusing in on the overconfident. We asked a couple of questions as you can imagine, most of the big concerns people have when thinking about retirement are like housing costs, healthcare costs, income savings.

[00:17:25] Jacquelyn Reardon: We asked a series of questions that basically, highlighted the fact that those are the key concerns yet, people said I'm going to rely on Social Security and Medicare. And then right after that, they said, but I don't know anything about Medicare and I can't really, it's not clear to me, like how much money I would get from Social Security.

[00:17:43] Jacquelyn Reardon: So I don't know. But that, that like one, two, three punch, you're like, of course these folks need some more education, some advice, some access to resources because they are relying heavily on something or planning to in the future, yet they don't have the knowledge set or they're confused about those two key things that are going to [00:18:00] be like the backbone of their future life in retirement.

[00:18:02] Jacquelyn Reardon: So I completely agree with that. It's almost proving to folks that there's a gap in knowledge so that they actually are motivated to go do something about it.

[00:18:12] Qi Sun: So I want to add to that. I think financial literacy has been a very hot topic, not only in private sector, but also in academia and I'm actually glad because of this attention, we made a lot of progress, but at the same time, I think I just saw the LinkedIn post from Dr. Lusati, which is the team who developed the objective measurement for financial literacy, which has been wildly tasked across not only this country, but globally, we made a progress.

[00:18:44] Qi Sun: We want to drive more and more attention on financial literacy, but we still see there's an inequality between different groups. And we're actually, we're finding from our decoding retirement study, certain groups are definitely falling behind. So I guess for us, the next question is for those people with different background, how we can help them differently, how we can customize education to different group of people.

[00:19:10] Jim Breen: Which kind of ties into maybe unique tools unique journeys would benefit from, right? Each person, as we talked about in the beginning is on their own journey. And how can we create tools or what tools need to be created in order for us to meet people where they are in that journey? Jacque, do you have any thoughts on that?

[00:19:29] Jacquelyn Reardon: Yeah, I couldn't agree more. I think we're taking like a one size fits all approach in every single way in our industry. And then also all over the place. And it just doesn't work. It doesn't resonate with people that the specific language we use, et cetera.

[00:19:44] Jacquelyn Reardon: And it even goes back to what Chris was mentioning early to around, If you're not getting people where they are, then you're going to miss this opportunity to pull people into a system that they're feeling already super anxious and less-than for not being a part of. So it's something that we absolutely have to solve for as soon as possible.

[00:20:03] Jim Breen: Yeah, that idea of personalization is huge, right? Yeah. How can we personalize that experience to make it unique? Because it's not a one size fits all. Yep. It'd be akin to us walking into the shoe store. And the saying, here's your size eight. What I'm a size 10. That's, we have shoes. Here's the shoe But Chris, I may have cut you off. I apologize. It sounds like you were going to chime in there.

[00:20:23] Chris McGlynn: No, it's just going to, I think, add to the important points that have been made here. And as participants get closer to retirement, they're getting closer to this phase of life that they don't have really any experience with prior.

[00:20:39] Chris McGlynn: And now they have to prepare for it. So they know what they've learned throughout their journey so far, and that's receiving a paycheck and that's saving money. But now all of a sudden you're not receiving a paycheck from your employer anymore. And you have, if you've saved in your 401k a sum of money to, to now last you for the rest of your life and the other, whatever else you might have as well too. So, they're put into a position where really there's very little experience they've had in the past. And so these resources that are talked about are so crucial because even the folks that think they know, right? Are now in this unique position and have to adjust those assumptions that they probably been operating on all along during their working life too.

[00:21:24] Jim Breen: Fantastic. Qi, I want to hear what you have to say, but I want to engage our audience on a couple of things real quickly. Don't forget. You can add your thoughts into the chat section of the LinkedIn Live.

[00:21:36] Jim Breen: We want to hear from you. Please ask those questions. We'll do our best to get to all of them if we can. And if not, we will connect with you after the event. But in a moment, we are going to put up our first PollEV QR code, which you'll scan with your device and jump into the conversation so we can hear what you have to say about the conversation.

[00:21:51] Jim Breen: But Qi, please go ahead and share your thoughts, if you could, about what we were talking about a moment ago.

[00:21:57] Qi Sun: Yeah, I think the personalization is also a very hot topic from the industry. You hear from people keep talking about that, but I think what we find from the decoding retirement study is actually the first step of personalization is to know your participant.

[00:22:12] Qi Sun: It's not only about their age, their income their gender. Those are basic, very basic information, but instead, I think we find from the decoding retirement study is that there are investment habit. For example, the measurement we use is our time preference, like their spenders or their savers, those kind of very inner part of the people will also impact our decision, maybe, and also how is their adoption process will look differently from other people.

[00:22:45] Qi Sun: So that's why I think when we talk about personalization on the first step is to get a plan, sponsor the employers to understand what, who are our participant, what they need based on their unique character, not only on, their age group. So I think that there's definitely a long way to go.

[00:23:05] Qi Sun: But I think we're on the right direction. And also, I think we're going to talk about that later in this session as well. The behavioral barriers and how we can first understand what are those mental blocks to prevent people make that selection and how we can use strategies, those innovative strategies to help them overcome that.

[00:23:27] Jim Breen: Yeah. Those mental barriers. Indeed. I'd like to jump into our first poll question here. And so the first question that we'd love to ask the group, go ahead, everybody scan with your device, that QR code, and we'll go into the first question here and it'll be shown on the screen here in a moment.

[00:23:45] Jim Breen: But the question that we want to ask first is what percentage of females are more likely to report low financial literacy than males? So again, the question is what percentage of females are more likely to report low [00:24:00] financial literacy than males? Interesting question. Let's, go around here. Jacque, what are your thoughts?

[00:24:06] Jacquelyn Reardon: I'm not surprised. I think every single year that we've done our survey, we have a bunch of different demographic slices where we see like an emphasized result. So if the average. says 50%, we'll see specific groups that have a higher percentage. And there's a lot of questions we've asked around feelings of security or, feeling like you have a plan, or are you ready for this, or is the current economic environment impacting you?

[00:24:31] Jacquelyn Reardon: And oftentimes women are the, key group where we see an emphasized result where they're feeling less secure. They're feeling less likely that they're going to meet some key milestones in the future, like financial independence.

[00:24:42] Jim Breen: Okay. Very good. Yeah. Chris, what are your thoughts?

[00:24:45] Chris McGlynn: Yeah, I agree with what Jacque shared too. It's, so important and that goes back to the customization, right? Meeting everybody where they are at each specific point in their life, and based on their backgrounds, and their experiences and who they are too. Yeah, very, yeah great, work being done.

[00:25:02] Jim Breen: Okay. Qi?

[00:25:04] Qi Sun: You shouldn't ask me this question.

[00:25:05] Jim Breen: You know the answer. Yeah.

[00:25:09] Qi Sun: But I would definitely say, I think the peer impact is also very important because where it goes, we support each other. So I think that's why it's very important to have those kind of dedicated working group for the females in the workplace to encourage themselves, to share their successful stories. That will be a very, I always say inspiring, and also encouraging.

[00:25:33] Jacquelyn Reardon: Yeah. And even for younger generations there's so many great organizations that get to particularly girls and, provide that financial literacy at a point in their life where they can, it's before they've perhaps decided, "Oh, that's not for me," or started to feel that sort of insecurity around "Oh, I, maybe I should know this already." So agree, with that support style.

[00:25:55] Jim Breen: Let's bring our audience in here. So I'm going to ask a different question here that our audience can engage with directly. At what point in your financial journey would you consider using more financial tools to engage with your plan? So this is an interesting one, right?

[00:26:11] Jim Breen: We want to loop in the folks that are joining us here live. So again, if you're joining us, scan that QR code, jump into that poll EV, and you might have to just add a name. You could add an initial is fine. But jump into that question and you're going to see a series of selections there. We want you to choose the one that you feel is the right choice.

[00:26:29] Jim Breen: And we'll get to that in a minute here. So at what point in your financial journey would you consider using more financial tools to engage with your plan? Being in the financial industry, right away, please. Yes, please. But that's not the case with everybody, right? What are your thoughts? Chris, let's start with you this time. What are your thoughts about that?

[00:26:47] Chris McGlynn: Yeah. I, think again, it's, part of it is the distribution and how that's being communicated, right? And, the approach to allow folks to be able to engage with it in the right mediums that make sense to them, right?

[00:27:01] Chris McGlynn: But I, I think, most of us can agree that the earlier, the better for, a lot of these things, but it's easy to continue to push. that down the road and not begin to plan earlier, because it feels like it's so far away when you're talking about retirement, right? And that is what the industry I think has done a really good job at over the years is, putting the emphasis on saving for retirement and how to best do that, and has gotten a lot of engagement there's still more work to be done, so long-winded way of saying, the sooner the better yeah, today is the right time.

[00:27:38] Jacquelyn Reardon: And Chris, earlier you said something about meeting people where they are and I feel like we've seen a lot of great work being done around engaging people at specific milestones. So maybe you get into your 401k when you first start your job because everyone's encouraging you to do that, but then you get married.

[00:27:54] Jacquelyn Reardon: And then you have a child, or then you buy a house, or then you reach a specific age milestone. And I think we, we collectively should also think about that as an industry of what are those key inflection points that maybe people will be like a little bit more likely to engage with financial tools and resources versus other times.

[00:28:12] Jacquelyn Reardon: And to your point I'm just going to wait for it. Like when I turn 65, no we want to get them engaged at different points.

[00:28:19] Jim Breen: All right. So let's just, let's go to the data here and see what people have to say. We're going to share that screen here and jump in. Wow. Okay. 73%. Wow.

[00:28:31] Jim Breen: Okay. 58%. We have our answer. Yeah. And I think that it for the first question makes sense. What percentage of females are more likely to report low financial, Qi your thoughts on this? I know you pulled a lot of the data, but what are some of your thoughts?

[00:28:49] Qi Sun: Is that right answer? I'm not sure. I'm just.

[00:28:51] Jim Breen: Yeah, it is the right answer. Yeah.

[00:28:55] Qi Sun: Yeah, I think it's, that's what we are facing right now. We're very fully aware this gap. But the thing is how we can reduce the gap. I guess that's the key question for us. And as a researcher, I think, There's a lot we want to learn, like how we can use different, guidance or interventions to reduce this gap.

[00:29:23] Qi Sun: But that's why I think from my perspective, for this decoding retirement study, we want to set the foundation. And in the future, we want to actually do more research to track this gap. Did we make progress? Any progress in the past few years, anything we did right and anything we did wrong. I think that's a very important for the future research plan.

[00:29:46] Jim Breen: Perfect. Perfect. That's interesting. And Chris any of the, any surprises and what we saw on the screen there, do you think?

[00:29:55] Chris McGlynn: No, I don't know. I also did see the answers before this.

[00:29:58] Jim Breen: Yeah, exactly.

[00:29:58] Jim Breen: Yeah, exactly. So it's [00:30:00] talking about though, Chris, I'd love to ask you a question with all the work that you do out in the field you're really hearing, where people are and what the needs are out there as you're engaging with sponsor plan sponsors, plan advisors and, to do that as you're having those conversations with the retirement plan sponsors and the the the plan advisors and, what stories are resonating most around why lifetime income solutions are needed and their defined contribution plans?

[00:30:30] Chris McGlynn: No, thanks for asking Jim. I, it's for so long, I, if we look 30 years ago, there were 90, 000 defined benefit plans in place, pension plans that pensioners knew that they were going to receive a benefit for the rest of their life.

[00:30:44] Chris McGlynn: As of 2020, I think it's around 23 to 25, 000. So there's been a big shift in that market, right? So now DC plans are being looked at as a potential solve now for that to create income. And when I'm, out there in meeting with folks, we hear a lot of the same things around this and, the best way I can describe it to your point about the story is I, go back to a few months back, we were sitting at the dinner table, my family and I, and,

[00:31:13] Chris McGlynn: my 15 year old daughter, Haley, who's in ninth grade brought up what a subject that she brings up almost twice a week. We can set our watch to it. She said, "mom, dad. Could I have more screen time on my phone?" And for those that may not know what screen time is, it's a setting on your Apple phones where you can limit the amount of time that they get on their phone, before all their apps just shut down.

[00:31:38] Chris McGlynn: My wife and I had actually talked a few days prior to that, knowing that she'd bring it up and we want it to be prepared for the next time she did. And so what our plan was when she brought it up this time was we said, "Haley, how much additional hours, do you think you should get?," because right now she's receiving three a day during the week, and a five a day in the weekends.

[00:31:56] Chris McGlynn: So it's 25 in total. She said an hour extra each day. So 32 hours. She said, okay, fine. 32 hours. We'll try it out. But what we're going to do is we're going to front load you all of your time at the beginning of the week. But once you're, you run out, that digital bank runs dry, you're done until Sunday begins again.

[00:32:14] Chris McGlynn: She's okay. I don't know how it's possible to be on your phone for 11 hours a day during the week when you're attending school six to seven hours a day. But she was, she ran dry by Friday, right? So she, was out and had to wait till Sunday. The following week, she was on my Thursday. Hey guys, mom, dad can we set the time per week?

[00:32:38] Chris McGlynn: And can I also have a little bit of extra time was her comment, right? So now we gave her an extra half hour. We met her in the middle, but we still have it lasting her throughout the week. And what I got from that was a lot about what we're seeing in market when we're meeting with these retirement plan advisors, these plan sponsors, it's.

[00:32:55] Chris McGlynn: As was mentioned before in the research and in the surveys, everybody's different, but even individuals are different based on their availability of these resources that they have, right? Because at some point, those resources will affect quality of life in a positive or a negative way based on those resources.

[00:33:13] Chris McGlynn: Also, Making things easier to understand daily versus weekly, versus monthly, monthly versus yearly, putting it in terms we understand a bit more. And, then also really it comes down to the integration, the technology being in place to allow this type of thing to work. Like the screen time, having that integration. Without that, we'd be taking their phone every night like we used to do, right? But now Apple's built this ingenious idea to allow us to be able to gauge this in the best way.

[00:33:42] Chris McGlynn: That's, so interesting. I have a 10 year old who will quickly be at the same stage as your daughter. And that's actually a really fantastic idea.

[00:33:51] Chris McGlynn: My wife and I might have to have a conversation to maybe implement that. Devices are not a we're not using the devices as frequently at that stage. But my goodness, that's, what a great idea.

[00:34:01] Chris McGlynn: Yeah.

[00:34:02] Jim Breen: And it seems like it's sounds like it's working.

[00:34:04] Chris McGlynn: It does. It works very well. I would recommend not front loading the time, but given that time each day

[00:34:09] Jim Breen: to, fantastic.

[00:34:11] Jim Breen: Any, thoughts, Jacque or Qi?

[00:34:14] Qi Sun: I think what I heard is the same story. And actually, I think I talked about that in one of my my latest research published is that the landscape of the retirement plan changed a lot. Used in the old time, we call it a three-legged stool, that's a social security, pension plan, plus your personal saving. Now it's officially changed to the two-legged stool stage. We only got whatever you save in the defined contribution plan, and the social security and turns out a lot of people didn't realize the change. So that's why I think in my paper, I highlight that this, reduction part in this guaranteed portion, can have a huge impact for our future retirees. And the most dangerous thing is they didn't realize that guarantee portion got a huge reduced because of the change of the retirement plans. So that's why I think we're trying to bring back that pension elements back to defined contribution plans.

[00:35:25] Qi Sun: That's exactly why we're sitting here and talking. And I think from my perspective, I just want to understand more about, yes, we see the need, and also we see how those guaranteed solution gonna help our future retirees, why they don't use it? That's the biggest challenge for my research actually.

[00:35:46] Jacquelyn Reardon: I, we, I love that you just mentioned that too. Some of the best calls to action, I think, in our survey this year is around, employers are doing so much. They're providing such diverse and really [00:36:00] modern solutions to folks from a tool resource and benefit standpoint. However, they're frustrated because many employees are not engaging and taking advantage.

[00:36:08] Jacquelyn Reardon: So we asked a few questions around why, and it was really surprising to see 50 percent of employees said they don't even know that these benefits exist. And then even worse, about 72 percent, and both of those stats are emphasized for the younger generations, 72 percent say, I know it's there, but I don't understand it.

[00:36:26] Jacquelyn Reardon: And one of the key ways that they don't understand it is because they have a hard time assigning a monetary value to that benefit. So to your point, like, All this great work's being done to create great benefits and tools and resources and employers are really stepping to the plate because they hear the call of their employees.

[00:36:44] Jacquelyn Reardon: But we have to figure out a different mechanism to make sure that people are aware that these great benefits exist and that they truly understand the value that they're getting, because if; again, if they're left to their own devices to use all their money all at once, or they could have access to something that can help meter that and, have them secured for life. What do we have to do to articulate that value to employees so that they understand their current picture and they, want to take advantage of it.

[00:37:09] Jim Breen: I'd love to jump into the second polling question cause it ties into what we're talking about here. So folks, get your phones ready, scan that QR code.

[00:37:18] Jim Breen: You can jump in and join us in the conversation for this live poll. And the second question that we're going to unpack here is financial literacy is positively linked to financial wellbeing. Studies show, high financial literacy correlates with what percentage higher financial wellbeing scores?

[00:37:36] Jim Breen: All right, and our options are 5%, 20%, 45 percent or 60%. So we'll give it a moment for folks to scan that, jump into the chat and we'll be there in a second to see what the results are. But yeah thoughts about this to the group here, financial well being versus financial literacy.

[00:37:58] Jacquelyn Reardon: I have a, just a quick one and it ties together what Chris mentioned earlier too, which is it's not just a matter of knowing it, it's also how does it, what's the context? How does it relate? You could give somebody a book to read on all things financial related, but how does, what does this mean to me, my family, my personal situation? That's that added piece of the puzzle from a meeting people where they are personalization standpoint that we have to get to.

[00:38:25] Jim Breen: Let's go to the data and see what folks have to say about that. All right. Oh, looks like we had a technical glitch there with the PollEV, so we'll, move on from that one, unfortunately. But the answer for that is 20%. 20 percent is the answer. Interesting, because a lot of the studies show that there is that direct correlation.

[00:38:45] Jim Breen: And it's important because we find ourselves when we get to these habits, these habit-forming environments, Chris, we talked about your daughter a few moments ago, right? Where we're in that situation as parents, perhaps, where it's how can we find a way to put them on the right path? And is there a way to connect the need for the right path to some of the things that they want to do, whether it's more time on the device or more time in front of the TV or whatever the case may be?

[00:39:10] Jim Breen: Yeah. But this is a great conversation. What I'd love to be able to do is let's throw that QR code up on the screen to have folks familiarize themselves with the key findings document as we dive more deeply into the, conversation here. And again, for those joining us, you can scan the QR code and you can jump into the landing page that will allow you to help unpack the, decoding retirement white paper also at the bottom of the screen to download the full version of that white paper going live today.

[00:39:40] Jim Breen: So we're real excited to have that out there. So head over there and check that out. There, let's talk about gaps for a moment here. There's a gap in how we as an industry can better provide resources holistically across the board. As we saw with the video earlier today, there are folks that feel somewhat comfortable, folks that don't feel comfortable, folks that need help in, the planning folks that want to do it themselves.

[00:40:09] Jim Breen: Let's talk a little bit about that, gap. Jacque, perhaps we can start with you.

[00:40:13] Jacquelyn Reardon: Yeah, I think the biggest gaps are related to our myopic approach to finances. I think for most, for, and most engagements are all about retirement. So it's just save a bunch of money and don't worry about it until you retire and you'll probably should retire at the exact same time that everyone else does.

[00:40:30] Jacquelyn Reardon: And that means stopping work and then you'll have this pile of money and then go move to Florida and play golf for the rest of your life. Yeah. I think that's one of the key gaps is that we're not engaging people across the full spectrum of financial needs. How do I pay my taxes? How do I pay down debt?

[00:40:47] Jacquelyn Reardon: How do I manage health care expenses? How do I save for retirement? Or maybe I don't actually even want to retire, right? So maybe I don't want to move to Florida and play golf. No, no offense to people who play golf or live in Florida, but maybe my later years look a lot different than Chris's and Qi's and Jim's.

[00:41:04] Jacquelyn Reardon: Maybe I want to keep working or maybe I want to start a new business. So, we're not really engaging people in a way that is one, personalized with context to their own situation which I recognize is difficult to scale, but we have to just do a better job of doing that. And we also have to engage people with tools and resources that are the full spectrum of financial needs.

[00:41:26] Jacquelyn Reardon: One of the, one of the I think interesting tidbits we got from like the benefits that people are interested in and resources is pet insurance, for example, is one of the top things that people are looking for. So that's an important something to people nowadays and there's a financial aspect to it that they need help with.

[00:41:43] Jacquelyn Reardon: So we're just missing all these opportunities to provide again, that holistic financial picture, when it comes to tools.

[00:41:49] Jim Breen: Yeah, pet insurance, definitely a hot button. Yep. Absolutely. Chris, gaps?

[00:41:55] Chris McGlynn: Yeah, I'd say based on what both Qi and Jacque, the research and [00:42:00] surveys they've done, it's in line with that.

[00:42:02] Chris McGlynn: It's making sure we're using the right assumptions and not assuming things that we think that we can assume, such as financial literacy being the same as annuity literacy, even smaller things like that, I think we, we would call it. And then, asking the right questions to the right audiences, Jacque, in the work that, that you've done, where, making sure that we're putting, the right question, we're not asking questions that don't have answers, right?

[00:42:30] Chris McGlynn: How long are you going to live? How much money do you need? We're asking the questions that allow participants to focus in on an actual solution and outcome, and putting them in a, position there. I think that's a couple of the key points that will help drive that gap or fill that gap.

[00:42:46] Jim Breen: Interesting. Qi, please.

[00:42:47] Qi Sun: I actually like what Chris just mentioned, asking questions. I think this is a very important part to narrow down the gap, because sometimes people, I think that's also linked back to what actually happened in their mind. Sometimes, people are so afraid to make a decision.

[00:43:09] Qi Sun: They will start there. They will choose not to make a decision until they have to. But I think when we keep asking them those questions, it's not like to force them to make a decision, but gradually to raise that awareness that, Oh, you need to start to thinking about this. This is not the thing you have to do right now, but please start thinking about this, how you plan to spend during your retirement.

[00:43:40] Qi Sun: Do you have a spending plan? Do you have an income plan? Also in terms of other important topics like paying off the student loan. Do you have a pay down plan for that. If so, how are you going to handle the payment to your student loan? So I think by asking those questions, it's very actually helpful to reduce the gap like, you know We don't want to force people to make a decision, but we want to raise their awareness that It's time to start thinking.

[00:44:13] Qi Sun: And also, I think this kind of a strategy I read a paper recently. That's one of the strategy to help people overcome those kind of mental blocks. Some there is a very interesting example that you don't want people to actively make the choice, you give them two choices.

[00:44:35] Qi Sun: Yes or no? That's the strategy to force people to start thinking to make a decision. Also, I think the author even mentioned that in order to make this strategy even more effective, you highlight the lose of not choosing that. For example, do you want lifetime income? If you don't want lifetime income, you have to bear that risk of living too long and running out of money during retirement.

[00:45:01] Qi Sun: So this kind of very, I say, I would say minor changes going to help a lot to reduce the gap.

[00:45:07] Jacquelyn Reardon: I love that approach too. And I think to something you said earlier, it's almost yes or no. And just by the way, a lot of people in your similar situation have said yes, right? Or like, people your age or people, cause I think that helps put some context behind it as well.

[00:45:24] Jim Breen: Yeah. behavioral circumstances. We, hear some of these hurdles and in plan solutions from a behavioral standpoint. Qi, maybe you can share your thoughts on that.

[00:45:35] Qi Sun: Personally, I think this is a fascinating area for me because it's very interesting to understand why people won't make that optimized solution.

[00:45:45] Qi Sun: So, I just give you a very simple example to explain what are those behavioral biases. For example, this is a very classic example in the textbook. When you flip a coin, either will be a head or a tail, right? But, let's flip the coin, let's say 10 times, and you see the heads 10 times. What is your expectation for the next 10 flips?

[00:46:09] Qi Sun: A lot of people think, oh, we already see the heads 10 times, next time won't be a head. The chance to see a tail will be very high. But turns out if you see from a pure statistical probability perspective, it's still 50 percent 50 percent chance for the head or tail. So that's the one type of bias people always have in their mind.

[00:46:31] Qi Sun: So that's same bias happened during the purchase process as well. And that's exactly one thing we test in the decoding retirement. We want to use more granular dollar amount to help people overcome that psychological pain when they handing over the money out of their own pocket, because that happened during the saving stage.

[00:46:52] Qi Sun: We saw from the past study that why people don't get motivated to save because people feel so painful to hand out their money. Even into their own savings account, so that's why if you break down this large saving goal into smaller portion that will actually be easier for people to onboard, that's inspire me for our testing module as well.

[00:47:16] Qi Sun: We trying to test whether the same strategy will help people to increase our adoption for lifetime income, because when you decided to, let's say annuitize part of your asset, is one time decision for a large amount of your asset. But what if we break that down into smaller portions? Will that be easier for people to onboard basically?

[00:47:39] Qi Sun: And turns out the evidence shows, yes, people will be more easy when we break it down that into smaller portion. And also in the past DCIIA Innovation Forum, I mentioned that is also related back to their mental budgeting period, right? If you present an annual premium amount to someone who are paid, let's say biweekly, how are they going to [00:48:00] handle this premium out with other expenses during the same month?

[00:48:03] Qi Sun: How are they going to plan this accordingly? So that's also something we feel like links back to the personalization. You need to know exactly who is your participant, how they are paid, how they plan their monthly budget or, or bi-weekly budget. And that's why we think knowing your participant is very important in terms of help them to adopt the option.

[00:48:29] Jim Breen: Absolutely. Any thoughts, Chris or Jacque, as to your research or anything that's you've uncovered with the behavioral side of those in-plan solutions?

[00:48:41] Jacquelyn Reardon: I, think I would just share I, love what you're talking about there around like the dollar amounts and the bias because one of the things we're finding around.

[00:48:51] Jacquelyn Reardon: Again, this diverse slate of tools and resources and benefits that employers are providing. Employees still have a tunnel vision of please just give me more money. in my paycheck and also increased match to my 401k and I think we're assuming actually that it's just very clear to them what the benefit is, right?

[00:49:09] Jacquelyn Reardon: I can see the dollar amount, whether it's in my paycheck or, it's related to a 401k match versus all of these other great benefits that include help with paying down student loan debt, access to guaranteed income in the future, all of these great things, helping contribute to their own child's 529, like things like that.

[00:49:27] Jacquelyn Reardon: But it's harder for them to see the actual like one for one dollar benefit. So they're either not accessing them, they're not paying attention to them, and they're not unfortunately utilizing them, which would help them in the future, have a more secured retirement.

[00:49:41] Jim Breen: Fantastic. This has been such a great opportunity to have the three of you join us in the studio here live and unpack it not just decoding retirement, but also to these great conversations about a voice of the american workplace survey Jacque, where could folks locate that if they were interested in checking it out?

[00:50:02] Jacquelyn Reardon: It's right on the FranklinTempleton. com website. So you could just Google Voice of America Workplace and it'll bring you right there. All the content is available for the public.

[00:50:09] Jim Breen: Fantastic. Yeah. A lot of great information unpacked there as well. So Jacque, thank you so much for, joining us and being with us.

[00:50:16] Jim Breen: Absolutely. Chris, thank you so much for taking the time to join us and be out here as well. And Dr. Qi, thank you so much for all the great work that you did putting the decoding retirement document together and the team that helped you with that. A lot of, great work, a lot of great efforts that went into that and hopefully a lot more great research to come out of it.

[00:50:36] Qi Sun: Yeah, I appreciate that and I actually want to, thank a lot of people here, especially from your team, we have been working with this project for, I think, over a year right now. Finally, today is that day. So, I really appreciate all the support from Pacific Life's team.

[00:50:55] Jim Breen: Absolutely. Absolutely, Qi. It's been a pleasure. I want to thank my team here in the room for all the great work and the setup and yeah there, they are. The great work of the setup that, that went into producing this. A lot of spinning plates, if you will. So great, job and kudos to them.

[00:51:13] Jim Breen: Also to you, our audience for taking time out of your day to join us, to be with us here for this live event, to learn more about decoding retirement and voice of the American workplace. And again, thanks for joining us. Catch us on YouTube, Spotify, and Audible hit like, and subscribe. So you can stay constant and current with the content that we're putting out.

[00:51:32] Jim Breen: Thank you so much, everybody for joining us and we'll see you next time.

[00:51:40] VoiceOver: This has been another episode. Of the Wave Strength, presented by Pacific Life. Don't forget to catch us on YouTube, and make sure to subscribe. Although this webinar is presented by Pacific Life, the opinions and views expressed are those of the hosts and participants and do not necessarily reflect Pacific Life's views on any of the topics discussed.

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[00:52:46] VoiceOver: Each insurance company is solely responsible for the financial obligations accruing under the products at issues. This webinar was recorded on March 21st, 2024.