When it comes to financial wellness, the term itself is not a cliche. It’s an important concept that a lot of Americans ignore.
Financial wellness, put simply, is the ability to have a healthy financial life. It means your debts are payable and you have ample emergency, college and retirement funds. You’re well prepared to handle any financial crisis.
In short, financial wellness is also about feeling good about your financial health now and in the future. Fortunately, large employers have picked upon on this concept and are offering financial wellness programs. They know that productivity comes with sound financial health.
The offering of financial wellness programs has mushroomed in recent years. More than half of employers offer them today, compared to 24% in 205, according to a Bank of America survey.
Are these programs effective? While they may not always induce employees to save more for retirement, they raise awareness and offer help on some key financial concerns:
- Majority of employees feel financially well: Employees who rate their financial wellness positively are more likely to feel that they can effectively manage their day-to-day finances, pay bills while saving for future goals, and that their retirement savings are on track.
- Personal advice continues to be a top priority: Employees rank advice from a professional as their top priority for a financial wellness program. Direct counseling from a financial professional makes a difference.
- Women lag men in retirement savings: Women have saved far less for retirement, reporting median retirement savings of $30,000, compared to $100,000 for men. This may be contributing to the fact that only 43% of women report feeling financially well, compared to 65% of men. These programs help increase awareness of this issue.
- Impact of caregiving on the workplace: 45% of employees perform caregiving duties for a family member, a number significantly underestimated by employers. Caregivers report missing an average of 12 hours of work per month due to caregiving responsibilities.