During 2013, Putnam found that of the participants who used the firm’s proprietary Lifetime Income Analysis Tool (see “Putnam Introduces Retirement Income Calculator”), 35% made deferral changes, and of those, 76% chose to increase their savings rate by an average of 25%.

“This data tells plan sponsors that deferral rates can be improved if we move beyond the traditional view of participant balances and investments, Edmund F. Murphy III, head of Defined Contribution at Putnam Investments, tells PLANSPONSOR.

The Boston-based Murphy says critical factors include putting retirement savings into the same monthly income context that people use to manage their financial life, making it easy to understand tradeoffs, and making it simple for participants to change their savings rates. “Context and simplicity will help drive additional savings,” he adds.

Results were noticeably more pronounced among plan participants who also used Putnam’s Health Cost Estimator, a feature of the Lifetime Income Analysis Tool, which provides an estimate of how much future income will be needed to cover health care costs in retirement. Those who used the Health Cost Estimator and made a deferral rate change, increased their 401(k) plan savings contributions from 7.7% to 9.9%—a 29% increase, and more than three percentage points over the industry average of 6.8%, as measured by the Plan Sponsor Council of America.

Murphy also notes that plan participants using the Putnam Lifetime Income experience to change their deferral rates, increased their savings by a much more significant magnitude—seven times more than participants who used other methods to change their contribution levels, such as by telephone.

The Putnam study analyzed the actions of more than 40,000 participants in Putnam retirement plans who used the Lifetime Income Analysis Tool during 2013, as well as more than 8,000 participants who accessed the Health Cost Estimator during the year.