Would you like to be on track for retirement, invest with confidence, pay down debt or student loans and reduce your financial stress by half? Of course, you would! You’re probably thinking it takes a fairy godmother, a unexpected inheritance, or a lottery win to make it happen – but you’d be wrong. The secret may be hiding in plain sight in your employee benefits.
Financial wellness benefits
Employers are competing to hire and retain the best workers by offering financial wellness benefits to help employees maximize their other benefits for their individual situations, tackle tough financial issues, and make progress towards important life goals. Chances are, you may already have access to one or will soon. More than 80 percent of employers plan to offer a financial wellness benefit according to recent research from Aon.
The best workplace financial wellness programs reach employees through a range of channels, including 1 x 1 coaching in person and over the phone, webcasts, workshops, peer to peer groups and online. Not sure how best to use your company’s program? Start here.
Money mentorship for your life goals
Most early career employees aren’t thinking about retirement. Instead, they’re thinking about the competing financial priorities of early adulthood: getting their own place, enjoying life, paying off student loans and, eventually, home ownership, marriage and parenthood. Mid-career employees are typically juggling work and family and the tsunami of bills that comes along with owning a home and raising children. Later career employees are concerned with getting their financial houses in tight shape before retirement. No matter what your goals are, your financial wellness program can help you manage your money wisely and more confidently so you can reach them.
The compounding effect
Financial wellness benefits are more common now, but some large companies such as Aetna, Nestle and Viacom were early pioneers in the financial wellness movement. Our recent research found that repeat users of financial wellness programs that have been in place since 2015 or earlier have benefited from a compounding effect, where gains in financial health have grown incrementally over time.
The research, based on a sample of more than 80,000 employees with a margin of error of +/- one percent, found that those repeat financial wellness program participants were:
Twice as likely to be on track for retirement. Forty-three percent of repeat users are on track for retirement, compared to just 19 percent of employees who are engaging in the financial wellness benefit for the first time. Repeat users are more likely to have run a retirement projection, which prior research showed was the single most important steps employees can take to reach their financial goals.
Half as likely to suffer from unmanageable financial stress About one in seven repeat users (14 percent) report high or overwhelming levels of financial stress, compared to one in four (27 percent) new users. That could positively affect their health care costs too since financial stress from debt is associated with substantially higher rates of illnesses like diabetes and heart disease.
Financially healthier than when they started. The average Financial Wellness Score™ of repeat users improved 22 percent from their first assessment (5.0 out of 10) to their last assessment (6.1 out of 10).
More confident investors. Sixty percent of repeat users are confident their assets are allocated correctly, compared to just 39 percent of new users.
Better insured. Seventy two percent of repeat users had adequate life insurance to protect their families, compared to 53 percent of first time users.
Beware of financial sales claiming it’s financial wellness
Financial wellness is a buzzword these days and Wall Street is embracing it as an advertising strategy. If a vendor is trying to sell you an investment or insurance product as a “financial wellness” program, that’s not financial wellness, that’s financial sales. A real financial wellness benefit is unbiased, with no sales pitch. Financial wellness is a state of financial health, not something you can buy. (See this infographic to determine if what your company offers is a financial wellness benefit).
Own your financial future
In 2018, your best financial services provider is likely to be your employer, especially if you work for a medium to large sized company. Through your employee benefits, you can do almost everything financial, from saving for retirement, managing health care costs, protecting your income and family against risk, and even paying down your student loans or going back to school. Use your financial wellness benefit to understand and maximize your benefits choices, grab a lifeline if you’re drowning in debt or student loans, become a better investor, get ready to buy your first home or prepare to retire. There is clear evidence that financial wellness programs work. Isn’t it time you started participating in yours?