Financial Wellness Needs a Long and Short Game to Work for Both Participants and Organizations

In the retirement plan industry, all too often we tend to conflate financial wellness with retirement readiness…

…whether that means confidence in obtaining retirement goals or being on track to reach post-employment financial targets. However, that limited view may fail to paint a complete picture for many participants.

For example, the New York Life Wealth Watch survey, released in July, highlights generational differences with respect to near- and long-term financial concerns and points to areas of disconnect among respondents’ financial self-assessments. Millennials (45%) report more confidence than both Gen X (35%) and Gen Z (33%) that their retirement savings will last the rest of their lives and express greater confidence than Gen Xers in their ability to retire when they want.

At the same time, Millennials indicate lower levels of confidence in their post-pandemic finances, with nearly one-third predicting that resuming pre-pandemic spending would have a negative impact on their household budget. Additionally, only 41% report feeling confident about their ability to make a down payment on a home. While emerging COVID-19 variants call into question the timing of “post-pandemic” assessments in general, these findings highlight the need for broad-based financial wellness assessments and programming nonetheless.

Near-term financial concerns are likely contributors to employee stress and can weigh on productivity. In fact, 42% of full-time employees find it difficult to meet monthly household expenses, according to PwC’s 2021 Employee Financial Wellness Survey. Student loans, housing expenses, food costs, and health insurance rates contribute to employee insecurity, and more employees have considered filing for bankruptcy protection than ever before in the survey’s decade-long history. If organizations fail to address worker financial wellness, PwC says, the additional psychological stress will likely continue to impact productivity and employee well-being.

Ideally, financial wellness should comprise a comprehensive and holistic approach that’s easy for companies to implement, provides targeted interventions, and taps both long- and short-term financial concerns. Moreover, your financial wellness program should offer proactive employee engagement with online education, group content and individual sessions. This is critical because it can be difficult for participants to focus on achieving long-term financial objectives when they have more immediate unmet needs and concerns such as being unprepared for financial emergencies or managing crippling levels of personal debt.

With pandemic uncertainties lingering a year and a half into the global crisis, financial wellness has become more important than ever. Retirement-focused education and programming are necessary, but not sufficient to meet all participants’ and employers’ needs in an increasingly complex world. Be sure your financial wellness program can help your employees and organization plan and prepare for today and tomorrow.

Representatives offer products and services using the following business names: Summit Group of Virginia LLP – insurance and financial services | Ameritas Investment Company, LLC (AIC), Member FINRA/SIPC – securities and investments | The Ascent Group, LLC – investment advisory services. AIC is not affiliated with Summit Group of Virginia LLP, The Ascent Group, LLC, or any other entity mentioned herein. Products and services are limited to residents of states where the representatives are registered. This is not an offer of securities in any jurisdiction, nor is it specifically directed to a resident of any jurisdiction. As with any security, request a prospectus from your representative. Read it carefully before you invest or send money. A representative will contact you to provide requested information. Representatives of AIC do not provide tax or legal advice. Please consult your tax advisor or attorney regarding your situation.

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