Employees who used their financial wellness program regularly improved in all areas of financial planning, with the greatest level of improvement in retirement preparedness, according to a new study from Financial Finesse.
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.
The El Segundo, California-based financial wellness provider also found a 50% increase in average retirement plan contribution rates (from 6.3 percent to 9.4 percent), a 41% increase in average contributions to a health savings account, (from $934 to $1,319), and a 26-point improvement in the percentage of employees who felt confident in their investment strategy (43 percent to 69 percent).
“The study’s findings have significant implications for what some industry experts have called a retirement crisis,” Liz Davidson, founder and CEO of Financial Finesse, said in a statement. “Employers have spent millions of dollars trying to address this problem …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.”
Indeed, according to the 2019 EBRI/Greenwald Retirement Confidence Survey, 70% of American workers say debt is having a negative impact on their ability to save for retirement.
Furthermore, 55% of workers say they are unable to save for retirement and save for other financial goals at the same time.
Fasted growing employee benefit
“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,” Davidson adds.
As evidence, a 2018 survey conducted by Alight Solutions found that 82% 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 benefits trends found that 53% of employees say their employers have a responsibility for their financial wellbeing.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
