Financial well-being programs are garnering an increasing amount of attention. These programs help workers address their financial needs, from budgeting and saving for retirement to paying off student loan debt.
The 2020 Retirement Confidence Survey, conducted by the Employee Benefit Research Center and Greenwald & Associates, examined which programs could be helpful for worker retirement preparation. In particular, approximately 80 percent of workers said that programs on managing competing financial priorities and emergency savings would be helpful in their retirement preparations.
Looking towards the future
While financial wellness programs offered by employers could help reduce debt, an additional by-product of these programs could be encouraging higher levels of retirement savings. Many workers report that debt is hindering their ability to save as their current finances are taking precedence over savings. For the most part, workers can’t focus on their future financial needs without first getting a handle on their current situation.
Programs allowing participants to calculate how much they need for a comfortable retirement and providing education or advice on how to convert assets into income are also said to be helpful in retirement preparations. Therefore, financial well-being programs benefit all workers, whether they can immediately save or not.
A balancing act
Due to the COVID-19 pandemic, many workers are facing harsh economic conditions and are likely to be left with unpaid bills or greatly depleted savings. Financial well-being programs could be an important vehicle that workers use to get back on track as the economy improves. However, employers will soon be facing demands to cut benefits. How employers navigate the competing demands of helping employees while also containing costs in a period of reduced revenue will have a profound impact on employees’ retirement.