PLANSPONSOR - February/March 2019 - 60

FINANCIAL WELLNESS
Picture Yourself
Behavioral strategies to make that future time seem more real
S
arah Newcomb, Ph.D., senior behavioral
scientist at Morningstar, works
to incorporate insights from psychology
into products and services to help
people make healthy financial decisions.
Her research includes a focus on how the
phenomenon of psychological distance
affects financial behavior. For example,
in a recent study, " The Comparison Trap, "
Newcomb looks at how social comparisons
affect our financial well-being. This interview,
conducted by Managing Editor Judy
Faust Hartnett, was edited and condensed
to fit our print format.
PS: How can education help plan
participants achieve a healthy
financial mindset?
SN: While there are no proven techniques,
the literature on financial education does
suggest that people remember best when
they learn simple rules of thumb at just the
right time. For example, you aren't likely to
remember a lot of technical details about
mortgages unless you're planning to buy a
house soon. The same holds for 401(k) plans
and other investment vehicles. Learning the
right rule of thumb at the right time is a way
to work within the constraints of human
brain capacity.
PS: If
learned at
financial education is best
the time it's required,
how can a sponsor carry out " right
time " learning for its participants?
SN: From a plan sponsor perspective, this
might take the form of offering short webinars
or trainings on specific topics that
60 PLANSPONSOR.com February - March 2019
Art by Carol Rollo
relate to life events such as college saving,
buying a home, investing for retirement
or building a savings fund for emergencies.
While you can't know exactly when
people will face certain financial decisions,
making sure they can access information
in plain language when they need it is key.
PS: Being a short-term thinker does
not jibe well with retirement readiness.
Are there ways to help people
start to think long term?
SN: From my behavioral research, rather
than chipping away at long-term savings
goals such as retirement, we tend to focus
on shorter-term things such as this year's
vacation, upgrading our wardrobe or eating
out on nights when we're feeling drained.
Vacations and takeout aren't inherently
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PLANSPONSOR - February/March 2019

Table of Contents for the Digital Edition of PLANSPONSOR - February/March 2019

Asset Consolidation
2019 Plan Sponsor of the Year Finalists
2019 Best in Class 401(k) Plans
Systematic Income
The Best of Both Worlds
Plan Defense
Picture Yourself
PLANSPONSOR - February/March 2019 - C1
PLANSPONSOR - February/March 2019 - FC1
PLANSPONSOR - February/March 2019 - FC2
PLANSPONSOR - February/March 2019 - C2
PLANSPONSOR - February/March 2019 - 1
PLANSPONSOR - February/March 2019 - 2
PLANSPONSOR - February/March 2019 - 3
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PLANSPONSOR - February/March 2019 - Asset Consolidation
PLANSPONSOR - February/March 2019 - 23
PLANSPONSOR - February/March 2019 - 24
PLANSPONSOR - February/March 2019 - 25
PLANSPONSOR - February/March 2019 - 2019 Plan Sponsor of the Year Finalists
PLANSPONSOR - February/March 2019 - 27
PLANSPONSOR - February/March 2019 - 28
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PLANSPONSOR - February/March 2019 - 40
PLANSPONSOR - February/March 2019 - 41
PLANSPONSOR - February/March 2019 - 2019 Best in Class 401(k) Plans
PLANSPONSOR - February/March 2019 - 43
PLANSPONSOR - February/March 2019 - 44
PLANSPONSOR - February/March 2019 - 45
PLANSPONSOR - February/March 2019 - 46
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PLANSPONSOR - February/March 2019 - 51
PLANSPONSOR - February/March 2019 - 52
PLANSPONSOR - February/March 2019 - 53
PLANSPONSOR - February/March 2019 - Systematic Income
PLANSPONSOR - February/March 2019 - 55
PLANSPONSOR - February/March 2019 - The Best of Both Worlds
PLANSPONSOR - February/March 2019 - 57
PLANSPONSOR - February/March 2019 - Plan Defense
PLANSPONSOR - February/March 2019 - 59
PLANSPONSOR - February/March 2019 - Picture Yourself
PLANSPONSOR - February/March 2019 - 61
PLANSPONSOR - February/March 2019 - 62
PLANSPONSOR - February/March 2019 - 63
PLANSPONSOR - February/March 2019 - 64
PLANSPONSOR - February/March 2019 - C3
PLANSPONSOR - February/March 2019 - C4
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