3 Realities of 401(k) Financial Wellness Programs
Personal financial education and assistance programs can be implemented to help employees learn how to conduct everyday financial business more effectively by changing poor spending and decision-making habits. To implement a successful 401(k) financial education program, there are some key guidelines which must be laid out up front.
First, both employees attending financial training sessions and those selected to lead such programs should understand that talking about financial illiteracy and associated problems is not a “taboo” discussion. People can be quite embarrassed to admit that they know little about finances, or that they are drowning in financial problems. Discussion on such topics should be encouraged, and all involved should be made to feel comfortable talking about such issues. This can be achieved by explaining that increasing financial understanding can relieve financial problems, and the stress that tends to accompany them.
Secondly, it should be made clear to employees that financial education programs are meant to be a source of guidance as well as information. People tend to wallow in their financial misery for years because they do not know where to go to receive help. If workers realize that their employer is taking action toward assisting them with alleviating their personal financial stress, then they will be more appreciative. Appreciation leads to loyalty and loyalty leads to greater efforts in job performance.
What employers should understand is that the majority of employees do not know how to effectively help themselves. They require guidance and assistance, especially in the area of personal finances, where statistics show they are extremely ineffective both in short- and long-term savings efforts. You can therefore provide a very necessary service by offering your workers financial education and assistance programs.
Finally, if you sit back and do not address problems with the personal finances and retirement savings of your employees, inertia will take a strong grip on any proactive savings actions offered through traditional means. The roots of the problem must be addressed, which are inadequate financial education, and the poor financial habits continually initiated by a financially illiterate workforce.
This valuable training can help workers climb out of the financial abyss, improve and meet their savings targets, and give them more confidence. These characteristics will in turn produce employees that are physically and mentally healthier, happier about their financial well-being, and more focused and productive at their jobs. While the employees benefit from this training, the company will see the ultimate reward.
Mark Singer, CFP®, is a seasoned financial planner and the founder of Safe Harbor Retirement Planning, where he has been guiding individuals through retirement planning since 1986. With nearly four decades of experience, Mark has assisted thousands in crafting personalized retirement strategies that align with their unique goals and circumstances.
An accomplished author, Mark has penned several books, including Don’t Outlive Your Money in Retirement! 7 Key Steps, The Changing Landscape of Retirement—What You Don’t Know Could Hurt You, and The New Financial Wellness: Changing the Conversation. These works offer practical insights into retirement planning and financial wellness.
