Financial calculators do work, provided you know how to make them work for your clients. In other words, an investment calculator is about as useful as you make it.

As a retirement plan provider, you may share two types of financial calculators with clients — savings calculators and investment calculators. A savings calculator will tell your clients how much money they should save monthly to meet their financial goals. On the other hand, an investment calculator will help your clients determine their rate of returns for sums invested for certain periods. Both are useful to share with plan participants, the second a little more than the first.

Here are points to note when talking to your plan participants about investment calculators to help them understand the advantages of using them.

Keep It Simple

Explain the terms used by these investment calculators as, for most people, they can appear intimidating. For instance, one can explain to clients the three basic terms to know:

  • Rate of return: This is very important for every investor as this is the financial base on which they will make your investment.
  • Principal amount: The initial amount paid upfront for starting an investment plan.
  • Final return amount: This is the amount they will receive at the end of the investment.

Explain how investment calculators make savings efficient

Calculators can present investors with efficient ways to save and grow money as well as help monitor and cut down on unnecessary expenses. Explain to clients that Social Security typically provides part of a retiree’s monthly income, but a financial calculator will help estimate the amount of money they’ll need to save in dedicated retirement accounts such as 401(k)s and IRAs.

Talk about the future

As financial calculators consider inflation rates, explain to clients how they help create emergency funds for job loss, etc. Explained right, investment calculators bring clarity to retirement savings and help set goals. For instance, one can explain how starting early and saving at least 15% of pre-tax salary for retirement will help in the long run.

Show how they can help make informed choices

Retirement calculators can help formulate living budgets based on work and inflation post-retirement. Because of their compounding effect, small changes in inflation can make massive changes in retirement savings. Tell your clients how a good financial calculator can help them determine expected returns from different investment amounts. For instance, show them how some financial calculators will help them compare plans and narrow down the best pension plan for their kind of lifestyle.

Above all, give financial clarity

One of the best things that a retirement calculator does is that it provides financial clarity, giving clear information on financial matters concerning expenses, savings, investments, and wealth creation.

Getting started on any kind of retirement plan can be intimidating, but clients must be encouraged to understand that it is never too late to start. This is a key part of a customer’s experience (CX) with a retirement plan provider. At Congruent, we offer solutions to help improve CX for retirement plan providers through the application of technology. Talk to us today!

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