According to a new book, Playing with Reality by neuroscientist Kelly Clancy, humans have been playing games for almost 10,000 years — they predate written language. Games are key to understanding our nature, not only because they are fun, but because they can serve as a simplified model for how our minds work.

“Uncertainty is a significant part of what makes any game enjoyable,” Clancy writes. By linking external rewards to humans’ internal motivation to understand, games allow humans to “explore and enjoy uncertainty in a nonthreatening way,” she explains. The brain rewards itself for making good decisions by releasing dopamine.

If the expected reward of making a good prediction is large enough, Clancy writes, “Humans can be motivated to behave over arbitrarily long timescales.” For example, children can be motivated to remain on their best behavior for months in anticipation of Santa’s arrival at Christmas time.

The idea of waiting a long time for a large reward also applies to retirement planning. Saving for retirement requires discipline, patience and the foresight to set aside money for the future. It can be frustrating for financially stressed participants to think about saving more for retirement, especially if they feel that they are not making enough progress or that they are missing out on other opportunities. It can be difficult to resist the temptation of spending that money on immediate gratification or short-term needs.

Using gamification to offer relatively small rewards could be enough to help move a participant to action. As part of the SECURE 2.0 Act of 2022, employers can now offer small financial incentives up to $250 to employees to encourage them to contribute to a retirement plan. Prior to the SECURE 2.0 Act, employers couldn’t provide incentives for participating in the plan besides matching contributions. It is not clear whether someone other than the employer — such as a plan’s financial professional or recordkeeper — could provide these incentives to plan participants. However, future guidance is expected from the Internal Revenue Service (IRS) on this issue.

Introducing elements of gamification into retirement planning can help participants overcome negative emotions they may have about saving by providing them with positive feedback, rewards and achievements to make them feel good about putting money aside for retirement.

Games can make retirement planning feel more fun and engaging

Incorporating game-like qualities to retirement programs can help participants understand the long-term benefits of saving for retirement and help them resist the temptation of short-term spending. Plan sponsors can introduce incentives to their retirement planning websites and apps, such as giving employees badges or points, allowing participants to “level up” for reaching certain milestones.

For example, Capital Group’s ICanRetire® program offers plan sponsors a retirement planning tool that helps participants visualize their future income and expenses. The program can be easily adopted into a plan sponsor’s retirement ecosystem, integrating with the plan sponsor’s company intranet and connecting participants directly with their retirement plan recordkeeper.

ICanRetire features engaging educational content, including opinions from personal finance thought leaders, a retirement personality quiz and other interactive tools. So far, the retirement personality quiz has been one of the most impactful elements of the ICanRetire program. Participants can access the quiz via a QR code, and based on their responses, the employee’s retirement personality is aligned to one of five animals, or avatars.

One of the plan sponsors currently using a version of Capital Group’s ICanRetire program is RWJBarnabas Health (RWJBH). This case study outlines how RWJBH was able to use the game-like qualities of the ICanRetire program to achieve a 54% increase in the number of their employees who raised their retirement contribution rate. The program didn’t just result in better online engagement over its first year; it inspired actual changes in participant behavior.

“The quiz was a huge hit,” says Algretta Hatcher, senior director of retirement at RWJBH. “Employees loved it and it created a buzz within their organizations.” RWJBH also gave participants pairs of socks at the event with little animals and the QR code on them, to help them remember their quiz results and share the quiz QR code with others.

The quiz results also helped RWJBH and Capital Group determine employees’ preferences for how and when to receive communications about saving for retirement going forward.

Games with social features can help motivate participants to save

Designers for retirement websites and applications can develop ways for participants to connect with other savers who share their goals and challenges and allow them to chat, share and compete with other participants. For example, health care companies use step-count challenges to encourage people to keep exercising and stay connected. By posting the combined steps that a team takes on a leaderboard on a weekly basis on an app or website, they create virtual competition and accountability among players. Plan sponsors could develop programs like these to encourage participants to take positive steps to improve their personal finances.

Although Clancy warns that some games bring out the worst in people — think of how family members can act during a competitive game of Monopoly — other games can be designed to result in socially beneficial outcomes, such as helping participants save more for retirement. 

Conclusion

To help make retirement planning a more fun and rewarding experience, plan sponsors can work to introduce game-like qualities to their retirement plans, such as building communities where participants can connect and compete with other savers.

Plan sponsors can encourage participants to take quizzes like Capital Group’s ICanRetire retirement personality quiz that determines what animal/avatar best represents where they are in terms of planning for retirement. The results of those quizzes can also help plan sponsors determine the best ways to communicate with those employees about saving for retirement.

Applying game design elements to retirement plans can increase the awareness, motivation and satisfaction of participants. Gamification, used responsibly, can also provide benefits for plan sponsors such as increased engagement and retention, potentially making gamification a win-win solution for both participants and plan sponsors.

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