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Benefits June 5, 2014
Employees More Focused on Overall Financial Wellness
June 5, 2014 (PLANSPONSOR.com) – Employees are showing more focus on their overall financial wellness, according to a Financial Finesse report.
Reported by Rebecca Moore
Seventy-eight percent of questions received by Financial Finesse’s team of Certified Financial Planner professionals during the first quarter of 2014 were proactive in nature, focusing on what employees could do to improve their financial wellness rather than what they needed to do in response to an immediate financial problem.
According to the company’s Q1 2014 Research report, the increased focus and engagement has contributed to improvements in employees’ financial wellness in several key areas. Since first quarter 2012, retirement preparedness has improved, as more employees report being on track to reach their income replacement goals in retirement (22% vs. 15%), and fewer employees report having taken a retirement plan loan or hardship withdrawal (25% vs. 34%).
In addition, investment management has improved since 2012, as more employees feel confident in the way their investments are allocated (42% vs. 33%), have a general knowledge of investing (74% vs. 72%), have taken a risk tolerance assessment (48% vs. 43%), and rebalance their investments (37% vs. 31%).
Financial Finesse also finds employees’ cash management has improved. Compared to first quarter 2012, more employees say they have a handle on cash flow (72% vs. 66%), maintain an emergency fund (55% vs. 49%), and pay their bills on time (89% vs. 85%). Debt management has improved, as more employees are comfortable with their debt (60% vs. 57%) and regularly pay off credit card balances in full (57% vs. 52%).
In its 2013 Year in Review report, Financial Finesse noted more employee engagement in employer-sponsored financial wellness programs. The company says this increase in engagement has led to more awareness of financial vulnerabilities, which has contributed to an increase in financial stress. However, rather than debilitating employees, the increased stress appears to be moving them to action (see “Employees Taking More Responsibility for Financial Stress”).
“If these improvements in financial wellness are sustained, we believe the current percentage of employees that report high or overwhelming levels of financial stress or report feeling that their financial situation is out of control will decline,” the company says.
The Q1 2014 Research report is here.