Practice Management

The ‘Attitude-Behavior Gap’

By Tom Foster

How often have you heard someone say one thing and then do another? While they talked the talk, they didn’t necessarily walk the walk.

For instance, the outdoorsman who says he’s concerned about the environment yet drives a gas-guzzling SUV. Or the woman who extols the virtues of a healthy lifestyle but doesn’t exercise.

It’s called the “attitude-behavior gap” and there is no better example than people’s attitudes about saving for retirement.

When asked if retirement is “too far away to think about,” 77 percent of Middle Americans disagreed, according to the MassMutual Middle America Financial Security Study1. Even Millennials – who may have literally 30 or 40 years before retirement – overwhelmingly agreed that they should be thinking about the day they stop working for good. The data certainly showed that Americans’ had positive attitudes about the need for retirement savings

The study, which measured attitudes of working Americans with household incomes of $35,000 to $150,000 about money and finances, also confirmed what many other research studies have found: Most Americans are not saving enough for retirement -- and they know it. It’s a behavioral gap.

Overall, 63 percent said they were behind when it comes to saving for retirement, MassMutual’s study found. Whether the study measured the results by gender, generation or income, the results were similar. Americans have a serious disconnect when it comes to planning for retirement.

People with household incomes below $45,000 were especially worried while people earning incomes between $75,000 and $150,000 were less so. This is another disconnect.  Social Security typically replaces a higher percentage of pre-retirement income for people earning lower incomes during their working years compared to their higher-income neighbors. Those earning higher wages often need to save more if they hope to continue their current lifestyles in retirement.

Fortunately, the study did show that people are able to at least take a glimpse in the mirror. Nearly three out of four (72 percent) said they are simply not saving enough for retirement. Again, it was the same for different incomes, generations and genders.

The study also showed that many people were also concerned about other issues related to retirement preparedness: 29 percent were concerned about not being prepared for their healthcare needs in retirement; 23 percent were not confident they have the right investments; and 18 percent threw up their hands because calculators or online tools projected they needed an unattainable amount of savings to retire.

While much of these findings are admittedly bad news, the silver lining is that most people intuitively understand they are under-prepared for retirement and need to do more. It may be an opening for financial advisors as many potential clients already admit they not only need to save more but are less than confident in their current investment strategy.

The findings are also helpful to advisors who support retirement plans.  The fact that so many people confess they need to save more for retirement yet aren’t doing so is a great rationale for behavioral finance tactics such as automatic enrollment and auto escalation.

Auto enrollment takes advantage of inertia or people’s tendency to do nothing or refrain from changing the status quo. While many people are slow to act when it comes to saving for retirement, they are just as slow to act to stop savings once they are automatically enrolled in a retirement plan.

A 2015 study by Vanguard, for example, found that the participation rate for employer-sponsored retirement savings plans was 91 percent when new employees are automatically enrolled2.  Meanwhile, plans with voluntary enrollment reported a 42-percent participation rate.

When those automatic contributions increase – say by 1 percent a year – many people are also disinclined to alter the upward trajectory of savings.

But it’s easy to get discouraged if someone or something – a retirement calculator perhaps – tells you that you need to save so much money that you can’t possibly see a way to accomplish your goal. So advisors should keep it positive and encourage small steps. And then keep encouraging more and more steps and bigger and bigger steps. Before long, you’re altering behavior.

Americans may have an attitude-behavior gap when it comes to retirement. But with the right support and guidance, advisors can help narrow and potentially even close the gap for many people.



E. Thomas Foster Jr. is head of strategic relationships for retirement plans for Massachusetts Mutual Life Insurance Co. (MassMutual).


1MassMutual Middle America Financial Security Study,

2Vanguard study on automatic enrollment, Jan. 20, 2015,