Couple 401(k) and financial wellness plans to help your staff

A company’s retirement plan is often the first place many U.S. workers go for financial advice. According to a study by T. Rowe Price, the top three financial objectives for workers are:

• Saving for retirement outside of the workplace retirement plan (74%).
• Saving to fund health care expenses in retirement (74%).
• Saving in the workplace retirement plan (71%).

The results of the study show how much value employees put on their retirement plans and how active they really are in trying to secure a sound financial future for themselves. With the stresses of rising costs, particularly health care expenses, many workers are having trouble managing their regular finances as well.

​Offering both a 401(k) plan as well as some financial wellness services as part of your voluntary benefits package can go a long way to helping them employees become better stewards of their finances.

In the study, workers needed assistance in choosing investments and trying to calculate how much they should save. They also were seeking advice on tracking their savings.

Because people seek information in different ways, it’s helpful to provide different channels for seeking advice. For example:

• Millennials indicated they would like advice that is accessible on their mobile phones.
• Generation X wants advice services that fit into their busy schedules.
• Baby boomers want advice that is easy to use.
• 64% of millennials say they rely on digital tools and calculators either somewhat or a great deal, while this is true for only 55% of Generation X and 42% of boomers.

Workers were also looking for more financial wellness services as concerns over their retirement and ability to pay for future medical care weigh heavily on them. Consider:

• 64% of workers said that reducing debt is a major or minor financial objective where advice could be useful.
• 75% said credit card balances are their highest form of debt.
• 65% said that having an emergency fund is a major or minor financial objective where advice could be useful.
• 56% said that managing and budgeting day-to-day expenses is a major or minor financial objective where advice could be useful.
• 17% said they always or often have difficulty paying their monthly bills.

 
What you can do
Financial wellness plans take a number of approaches, from helping with student loan repayment to setting up an emergency fund and budgeting. The goal of offering these plans is to minimize your employees' financial stress and boost workplace productivity. 

Financial wellness plans may include:

Financial education - This education should go beyond just retirement planning. It needs to encompass a number of components like retiree health care, Medicare education, investment management, asset-allocation instruction and retirement financial planning.

Digital platforms - There are a number of websites and apps that can help your staff with cash-flow management and that include retirement or savings calculators, and more.

Financial coaching - This is different from a financial advisor or planner. A financial coach is more focused on the basics of finances and addressing financial habits.

Debt management - This usually focuses on student loans. There are some options for student loan repayment assistance that come at little or no cost to the employer. These plans will often work with a lending or refinancing partner to reduce the overall loan repayment burden on your workers.

Investment advisors - Licensed advisors can help workers get started with saving, creating a budget, preparing for retirement, and more.