Offering a financial wellness plan is one way to help
With the recent Tax Reform Act, many employees find themselves with a little more in their paychecks. If companies are doing well, perhaps giving raises and bonuses, this too will help employees have extra cash. According to a MarketWatch article, “Americans have rarely felt this good about the economy. Millions of people have found work, layoffs have fallen to levels last seen in the late 1960s, incomes are rising and businesses are investing.” But as we know, these events are cyclical. Unfortunately, there will come a time when we’ll have to manage through another downturn.
A recent study from Guardian has found that, for working millennials in particular, having a detailed financial plan and knowing more about financial products and services is just as important as a bonus for improving employees’ confidence. The takeaway? Now is a time to invest in workplace benefits that employees will truly find value in, such as a financial wellness program.
A financial wellness program will allow employees to better withstand the occasional curve balls life throws at them. These can include career changes or personal financial setbacks. Having a financial plan in place will help to mitigate those potential setbacks, and it certainly will reduce the stress that such a setback would otherwise cause.
Speaking of employee stress on the job, even in this economically robust time, employees are increasingly stressed. Money is cited as the No. 1 source of stress for a majority of workers, followed by job security and physical health. Progress on a variety of personal financial goals appears to have taken a negative turn in the past two years. Notably, more workers indicate they are struggling to meet their goals related to saving for retirement, managing debt, and protecting their family in the event of premature death or being out of work for an extended period due to a serious illness/injury, according to the fourth annual Guardian Workplace Benefits Study.
There are online tools that allow people to view their budget and set up automatic bill payments—this is a good first step as it provides a view of current cash flow, but it is ultimately a myopic approach. It can’t take the place of a financial professional’s assessment. Working with a financial professional will provide an overview, long-term planning and goals, and will help the employee to set up financial “shock absorbers.”
Just as employees look to their employer to provide them with access to health care coverage, disability coverage, dental, vision and various voluntary benefits, many employees are beginning to expect access to a financial advisor or at least a formal financial wellness program. According to Prudential’s 2018 survey of employee benefits, 83 percent of employers offer some sort of financial wellness program. As an added bonus, many financial wellness programs are modestly-priced; some even are free if the company has other lines of business with the consulting firm.
Company-sponsored financial wellness programs introduce employees to essential personal finance concepts that will provide guidance and create healthy habits. It's a learning experience that can have a powerful effect on financial decision-making so participants can achieve a higher degree of control over their lifetime earnings and overall financial picture no matter what the country’s current economic situation may be.
Thomas D. Wyatt, JD, CFP®, AIF®, is an executive director with Lifetime Financial Growth, LLC, located in Columbus, Ohio.
Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice.
2018-68296 Exp. 10/20