Tech makes saving to retire less of a chore or a bore

Saving for a secure retirement is about to get a whole lot easier  — and possibly even fun? — thanks to technology.  New apps and computer programs are encouraging Americans to save in hopes of bridging the $7.7 trillion gap between what they've put away for the future and what they actually need.

"New technology has an important role to play,” says Aron Szapiro, a policy expert with Morningstar subsidiary HelloWallet. It offers immediate feedback to help plan for retirement, allows for quick behavioral testing so researchers can learn how to get folks saving, and it can aggregate accounts to paint clear, complete picture of a person's finances.

So what’s in store for us in the future?

Better calculators. Calculating how much money you’ll need to fund your desired standard of living in retirement is, well, near impossible. You don’t know how long you’re going to live, you don’t know what inflation will be and you don’t know future investment returns. But that’s about to change.

“Future innovations will certainly include more robust cost calculators to ‘show’ people where they are and what they may need to do to achieve their goals,” says Joseph Coughlin, the director of MIT's AgeLab. “We can imagine these to be powered by big data and algorithms that will provide insights on where a household might be on the retirement savings glide path.”

Financial entertainment. According to the Senate Special Committee on Aging committee, many new apps and programs have the potential to leverage behavioral economics to steer people toward saving and to improve financial literacy. Others will use the power of games, such as prizes or competing with friends, to inject some fun into learning about some not-so-exciting topics, like finance.

“We will see games and gaming be more popular given their capacity to engage and the potential of making finance — fun," says Coughlin. "This may be particularly relevant to Millennials and Gen-Z.”

To a degree, this is already happening. Timothy Flacke, executive director of the Doorways to Dreams Fund (D2D), says his organization has developed a suite of online and mobile financial video games focused on budgeting, managing debt and saving for retirement.  For instance, SavingsQuest, D2D's Web and mobile app, combines the fun of video games with the popularity of fitness trackers to create motivation and instant gratification for saving.

Peer pressure. Other tools, meanwhile, will put peer pressure to work to encourage effective planning and saving. “Understanding how ‘other people like me’ are behaving has been shown in MIT AgeLab research to provide real motivation to possibly pass on the wide-screen TV to put a little more into savings … or to buy at least a few less inches of screen so there is some savings,” says Coughlin.

No silver bullets. However, there won’t be one app, program or platform that solves the retirement crisis. “We need to find many, not one, silver bullets to have people save for a life that is going to be closer to 100 years than ever before,” says Coughlin. In addition, technology can't replace the human touch, Szapiro says. Complex problems call for a hybrid approach “where software helps people understand their options and stay on track," combined with human expertise.

Bottom line. According to Coughlin, smarter, more robust calculators, games and social will be delivered by next-gen retirement tech and apps. “None of these alone will improve retirement security,” he says. “However, together with a greater social awareness that we are planning for a longer life, not just retirement, will make our combined financial futures a better life tomorrow.”

Robert Powell is editor of Retirement Weekly, contributes regularly to Paste BN, The Wall Street Journal and MarketWatch. Got questions about money? Email Bob at rpowell@allthingsretirement.com.