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Financial Wellness Can Increase Retirement Plan Contributions

Saving for retirement may be one of the most important financial decisions you can make to help ensure future comfort and security. But saving for retirement isn’t always easy.
By MSA Staff

Saving for retirement may be one of the most important financial decisions you can make to help ensure future comfort and security. But saving for retirement isn’t always easy. Around 70% of employees say that they are saving less for retirement than they think they should. This means not only are the vast majority of workers struggling to set aside money, but businesses are suffering from increased costs when employees delay retirement. According to an article on BenefitsPro, “a 2019 Fidelity Investments study found that 73 percent of employers reported increased costs when employees delay retirement; 31 percent said it inhibited strategic planning; and 21 percent reported lowered productivity.”

So how can employers help promote retirement savings and encourage employees to retire on time? One of the most effective ways to encourage smart money management is by implementing an employee financial wellness program.

What is Financial Wellness?

Financial wellness describes many different aspects of an individual’s financial circumstances. Think of financial well-being as the sum total of all your financial habits. In a professional setting, financial wellness programs are designed to offer employees resources, information, and education to help them understand their finances and plan ahead for future expenses, thereby reducing the level of financial stress they experience and creating a sense of wellness.

A financial wellness program might include:

  • Weekly, monthly, or yearly budgeting techniques with an emphasis on saving money.
  • Insights on how to prepare for financial hardship by creating an emergency fund.
  • Coaching on how to more effectively save for retirement.
  • Planning techniques for reaching other financial goals like paying off debt.
  • Tools to achieve greater financial freedom in the future.

Successful financial wellness programs offer personalized coursework and resources for employees seeking to improve their finances. Just like other wellness regimens, financial wellness caters to each employee’s specific needs while still providing a multifaceted approach to money management.

How Can Financial Wellness Programs Encourage Retirement Savings?

Saving for retirement looks different for everyone, but nowadays, many companies offer employees an option to participate in a 401(k) retirement plan. Despite the proliferation of 401(k) options, about 25% of employees still don’t take advantage of opportunities like company matching programs.

Financial wellness programs can encourage employee participation in 401(k)s and other retirement plans by providing educational information about the benefits of saving for retirement as soon as possible. Additionally, financial wellness programs might offer employees an opportunity to work one-on-one with a money coach to discuss a more personalized approach to savings. The goal of a financial wellness program should be to provide employees with the resources they need to make financial decisions for their lifestyles.

How to Encourage Participation in Financial Wellness Programs

Effective financial wellness programs are tailored to address each team’s unique interests and needs. This being said, many financial wellness programs lack the personalization and depth necessary to intrigue reluctant workers. Employee participation in these programs hinges on careful planning and individualized content.

  • Use Employee Feedback – Instead of implementing a program without understanding your employees’ needs, send out a short, anonymous survey to gauge general interest in certain topics (e.g. debt relief or retirement planning). This way, your program can include resources that are relevant to your employees’ financial concerns.
  • Communicate With Your Team – Keep the channels of communication open and encourage team members to participate in retirement programming. Demonstrate your genuine interest in employees’ financial well-being and explain the resources available through your wellness program.
  • Emphasize Perks – If your company offers any bonuses like matching employees’ 401(k) contributions or auto-enrollment in 401(k)s, be sure to emphasize the long-term benefits gained by early investment in retirement.

What are the Benefits of Financial Wellness Programs?

Long-term financial wellness can entail implementing daily habits on a big-picture scale. This means that the benefits of financial wellness programs can impact your company on both micro and macro levels.

On a micro level, financial wellness programs can reduce employee stress by offering employees greater agency over their finances. Reduced stress can result in greater productivity and creativity at work, making employees more dynamic and effective.

On a macro scale, offering financial wellness programs fosters a work environment that encourages employee success and financial independence. In turn, this type of work environment can lead to less employee turnover and greater overall satisfaction and happiness.

Transforming Employee Finances with My Secure Advantage

At My Secure Advantage (MSA), our team offers personalized financial coaching to help people build better habits and achieve their financial goals. For example, MSA members typically experience an average increase of 4.4% in retirement contributions from their annual salary when they work with a Money Coach.* With MSA, you can expect professional and empathetic financial coaching that helps reduce stress and uncertainty. At MSA, we know that finances are personal, and our team is dedicated to providing the right tools and educational resources to address financial needs.

Planning for retirement doesn’t need to be stressful. Join us at MSA today and embrace a brighter financial future.

* My Secure Advantage, Inc., January 2023. Based on MSA member self-reported data, when working with a coach on this specific issue, from 1/1/21 – 12/31/22.

Information provided in this article is for informational purposes only and is not intended to offer specific personalized investment, financial planning, tax, legal or accounting advice.  We recommend that you consult an attorney, tax advisor or accountant regarding your unique circumstances.

My Secure Advantage, Inc. or any of its representatives do not endorse any of the websites or company names listed here.

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