|Long-term use of Financial Wellness benefits linked to vast improvements in retirement preparedness
EL SEGUNDO, CA, May 14, 2019 - Financial Finesse, the innovator of workplace financial wellness programs, today released their 2018 Financial Wellness Year in Review report highlighting the current state of financial wellness in America. This year's report includes the results of a multi-year study focusing on 2,458 employees who regularly engaged with their employer's personal financial wellness program from 2013 to 2018 to determine how they progressed financially.
The study found that employees who used their financial wellness program regularly improved in all areas of financial planning, with the greatest level of improvement in retirement preparedness. In 2013, 21 percent of participants included in the study indicated they were prepared for retirement. By 2018, that number rose significantly to 57 percent.
Other improvements included:
"The study's findings have significant implications for what some industry experts have called a retirement crisis," says Liz Davidson, founder and CEO of Financial Finesse. "Employers have spent millions of dollars trying to address this problem, through incentivizing employees to save by matching their retirement plan contributions, automatically enrolling employees into their retirement plans, and providing employees target date fund and professionally managed accounts designed to invest their assets in line with their retirement goals." She adds, "Each innovation has been heralded as the solution to the problem, and while they have absolutely had an impact, getting millions of working Americans to save enough to retire comfortably has turned out to be much more complex than originally expected."
- A 50 percent increase in average retirement plan contribution rates, from 6.3 percent to 9.4 percent
- A 41 percent increase in average contributions to a health savings account, from $934 to $1,319
- A 26-point improvement in the percentage of employees who felt confident in their investment strategy, from 43 percent to 69 percent
Indeed, it has. According to the 2019 EBRI / Greenwald Retirement Confidence Survey, 70 percent of American workers say debt is having a negative impact on their ability to save for retirement. Furthermore, 55 percent of workers say they are unable to save for retirement and save for other financial goals at the same time.
Greg Ward, Director of the Financial Wellness Think Tank and co-author of the report, says it is the most significant research the firm has conducted because it studies the effect of engagement in a financial wellness program for the same group of employees over a five-year period. According to Ward, "Retirement preparedness is a lifelong endeavor. Even the best retirement plans can't compensate for an employee who simply is unable to save sufficiently due to high levels of student loan debt, rising health care expenses, and a society that places a premium on 'living your best life' with experiences that are largely out of reach for most Americans." He continues, "The reality is that most employees need financial coaching to overcome these obstacles."
According to Davidson, "Financial wellness programs that offer access to online tools and resources, group education, and personal financial coaching delivered by CERTIFIED FINANCIAL PLANNERTM professionals employed as full-time educators, are rapidly setting the standard for a national movement towards financial wellness." She notes, "With over 300 firms touting themselves as financial wellness providers, financial wellness has become one of the fastest growing employee benefits and, for many organizations, an imperative from a social mission perspective." As evidence, a 2018 survey conducted by Alight Solutions found that 82 percent of employers cited "We believe it is the right thing to do" as a reason for offering a financial wellbeing program. Similarly, a 2018 MetLife study on employee benefit trends found that 53 percent of employees say their employers have a responsibility for their financial wellbeing. Davidson adds, "Companies that ignore this issue put themselves at a distinct disadvantage when it comes to recruiting and retaining talent."
Ward will be presenting the findings, as well as best practices around successfully deploying financial wellness as an employee benefit, at the Employee Benefit Research Institute's 85th Policy Forum on Thursday, May 9th, 2019. Both Ward and Davidson will be discussing the findings and implications for employers and the financial services industry through a live webcast on Tuesday, May 14th, 2019.
About Financial Finesse:
Founded in 1999, Financial Finesse is the largest independent provider of unbiased workplace Financial Wellness programs. All services are designed by unbiased Certified Financial PlannerTM professionals who do not sell any financial products nor manage assets and delivered as completely subsidized employee benefits. www.financialfinesse.com