Save for retirement or a child’s education? Should more go to health care, or caring for an elderly parent?
Competing financial priorities are too often the death knell for salary deferred saving, and T. Rowe Price aims to do something about it.
Recognizing the positive effects auto-features have had on retirement plan participation and savings rates, the Baltimore-based investment behemoth will apply the lessons learned to other sources of financial stress.
The company announced the integration of an online cash flow management tool, DoubleNet Pay, into T. Rowe Price’s defined contribution plan participant program.
The tool, according to T. Rowe, “allows individuals to take control of their competing financial priorities by automating their spending and saving for short- and long-term goals.”
Participants who enroll in the service can manage their income by establishing deductions from their bank account to apply toward emergency savings, bill payments, and debt management.
Each month the identified dollar amounts will be automatically deducted from an individual’s paycheck, so they can clearly see and understand their disposable income. The tool will be available on T. Rowe Price’s Workplace Retirement website.
“We’ve heard from many employers that day-to-day financial management and budgeting is a concern of their employees,” said Diana Awed, head of product and marketing for T. Rowe Price Retirement Plan Services. “When individuals are reviewing their retirement savings, they are also naturally thinking about the here and now in terms of spending and saving. We’ve seen the impact automatic services can have on financial behavior, particularly with retirement savings, and believe the addition of DoubleNet Pay to our financial wellness program will encourage employees to get on the right path with their finances, including paying down debt, starting an emergency fund, and saving for retirement.”
“DoubleNet Pay was created to help people easily pay their bills on time and to start a savings fund before spending their money on discretionary items,” said Brian Cosgray, DoubleNet Pay’s founder and chief executive. “The tool is significant because individuals are able to enroll in the service annually for less than the cost of a bounced check or the late fee on a credit card. We hope making financial best practices automatic each pay period will boost positive financial behavior.”
T. Rowe Price’s ‘Retire With Confidence Program’ for participants includes both proactive and on-demand communications for participants at every life stage on topics like planning, saving, and investing—delivered through multiple channels, including video, online, and webinars.
The program helps individuals understand actions to take with their finances that can lead to more positive outcomes.
With the added capability of DoubleNetPay, participants will be able to automate the management of their cash flow, budgeting for unexpected expenses and saving toward longer-term goals, including retirement.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
