• Mark Nicholas

Whose Game are You Playing

Gamification, the practice of encouraging desired behaviors through leveraging your human inclination to win, is everywhere. It drives loyalty programs, educational initiatives, video games, online gambling and even your 401(k). While we all like to have fun, sometimes the encouraged behaviors are counterproductive to our wellbeing, even when the outcomes seem to be good for us. Inside 401(k)plans, gamification encourages employees to start saving and employees who are saving to increase their savings. This could be tied to public recognition (leaderboards) or peer comparisons (posting average company savings rates), for rewards for completing ancillary tasks (e.g. wellness program activities) that indirectly encourage retirement savings, or other like initiatives. Whatever the game, it’s important to stop and consider whose game are you playing and what role are you playing in their game. One thing is certain – it’s not your game!


Saving is generally a good thing. But the vehicle that is best for you to save and the rate at which you save in each vehicle will vary considerably from saver to saver, based on personal circumstances. A family with no emergency savings may be better off committing to a savings account than their retirement plan, especially if the plan doesn’t permit hardship distributions or participant loans. It may be best for someone to increase their contributions to a health savings account instead of increasing their 401(k) contribution. An employee’s optimal play to improve their finances could be to aggressively pay down credit card debt. There is no one right solution and saving in the 401(k) might put you further behind on your financial goals. The game doesn’t recognize anything outside your 401(k) plan though, it exists to drive assets into that vehicle.


Gamification in your 401(k) exists to increase provider compensation, not to improve your retirement. In this, you are the pawn, not the game designer. It is their game, designed primarily for their benefit. Provider compensation increases with every individual that starts saving and with every extra dollar saved. This isn’t to say that providers never care about you; I know many retirement plan professionals that want to help savers do the right thing; however, when service provider revenue is tied to participation in a particular savings vehicle, you would be wise to recognize the conflict of interest and consider who is playing which role in the retirement game before playing along.

4 views0 comments