Betterment teams with Lumity on retirement, financial wellness benefits

If the pandemic has taught employers anything, it's that cookie cutter benefits aren’t enough to keep employees happy and secure, especially when it comes to their financial wellness. Employees are looking for more robust benefits that will help them get through today’s challenges, while also protecting their futures.

Betterment’s 401(k) business has teamed up with Lumity, an employee benefits and health insurance marketplace, to offer a retirement plan and suite of financial wellness tools. By teaming with Betterment, Lumity is making it easier for employers to offer employees a robust 401(k) plan, without ignoring their other financial goals.

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“During our planning sessions with our clients for 2022 benefits, financial wellness is front and center, so the partnership between Betterment and Lumity made perfect sense,” Amit Ahluwalia, Lumity’s national employee benefits practice leader, said in a release. “Between our two companies, there’s a great alignment of values and shared commitment to deliver a better benefits experience to employers and employees.”

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Finances are the top cause of stress for employees — 54% of employees surveyed by PwC said financial or money matters cause them the most stress. The onset of the COVID-19 pandemic didn’t help matters, yet the crisis highlighted how woefully unprepared employees are for any type of financial emergency, as 38% of employees have less than $1,000 saved, according to PwC.

When it comes to retirement, employees are faring even worse: 22% of employees have less than $5,000 saved for retirement, according to a study by Northwestern Mutual. TIAA recommends the average employee put 10% to 15% of their yearly income toward retirement.

Employers need to think about their employees’ financial wellness beyond just a 401(k) and offer benefits that help them secure both their present and future financial plans.

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“During COVID-19, a lot of people across the country are thinking about their financial stability,” says Kristen Carlisle, the general manager of Betterment for Business. “Retirement planning spans beyond a 401(k). That is normally the first entry point someone has when thinking about long-term financial planning, but it shouldn't be the only stopping point.”

Lumity will have access to Betterment’s suite of financial planning resources, including a digital investment platform that evaluates an employees’ overall financial situation and provides resources and advice for maintaining a healthy monetary situation and building a strong foundation for retirement.

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But providing robust 401(k) and financial wellness benefits doesn’t just help employees in the long-run. Employers can reap the rewards of a more financially stable workforce.

“When you think about the emotional stress that many employees feel when it comes to their finances, you can also measure it from a productivity standpoint,” Carlisle says. “So when [employers] can help them along the way, it’s a huge net benefit when you think about retaining and really growing the talent that you have in house.”