The retirement crisis is really a savings crisis. If you can get employees to strengthen their overall savings through improved financial wellness, the crisis could likely disappear. The problem is that we are a nation of consumers, not savers. In fact, we stack up pretty poorly against other developed nations when it comes to saving.
Here are some alarming stats:
Not only are we spending, we’re spending more than we are making. This behavior cuts across social and economic classes, as well as education levels. So why should corporate America care if people aren’t taking responsibility for their financial security? Because it is simply smart business—financially stressed employees are typically less productive and less engaged.
According to HelloWallet, more than one-third of Americans spend two or more hours each work day handling or worrying about personal finance matters. Financial stress is frequently listed as the top source of stress experienced by employees, especially those in lower income brackets. Financial stress is also preventing your employees from saving for retirement. Below are some ways a financial wellness solution can be impactful:
Helping Employees Reduce Debt
Once an employee has control over debt, he or she is going to be in a much better position to save more aggressively.
Helping Employees Build an Emergency Fund
Many of your employees are one medical bill or one leaky roof away from bankruptcy. So, when emergency strikes they either run up their credit cards or they raid their 401(k). This program can help them develop an alternative to increasing debt and dipping into their retirement.
Turning Employees into Smarter Spenders
You can give your employees tools to help them budget and track their expenses, as well as prioritize their savings goals.
Every plan should consider adding a financial wellness solution. We realized that no matter how great the investment solution, employees might not reach their goals if they are not saving enough.