AS RETIREMENT PLAN SPONSORS CONTINUE TO WITNESS that employees who have their financial house in order are better able to save for retirement, financial wellness programs evolve.
For example, they are shifting from general financial education to become more tailored for different demographic groups and ages. Plan sponsors are also starting to offer financial wellness programs that motivate and prompt employees to take action to improve their financial outlook.
To achieve this, a financial wellness program needs to include an adviser or coach, some say. “There are many financial wellness programs out there, but they don’t get used unless they are paired with a coach, accountability for the participant and making the participant confident enough to use them,” says Jim McDonald, a partner with Channel Financial. “On January 2, the gym is packed. On February 2, it is empty—unless you have a personal trainer keeping you on track. The same concept applies with a financial coach.”
It is also important to suggest participant goals that seem attainable, says Kenneth Forsythe, head of products strategy at Empower Retirement. This is why Empower developed a new tool, the Next Step Evaluator, he said. Empower plans on rolling out the tool, now in pilot, to all of its clients by this coming February. “Don’t overwhelm people with the entire path they must take to achieve a financial goal,” he said. “Instead, focus on the very next step they must take, the best use of