Financial concerns and readiness for retirement remain top worries for Americans, even as many employers are trying to help by offering financial education benefits.
The dichotomy was highlighted this week with the release of a Gallup poll showing that approximately 64% of Americans say they enjoy saving money more than they enjoy spending it. At the same time, 59% worry they will not have enough money when they exit the workforce. These figures, from Gallups April 3-6 Economy and Personal Finance Poll, emphasize the disconnect between readiness and reality, say Gallup researchers.
Since 2009, Gallup researchers point out that while the majority of Americans report they enjoy saving, the reality is far different. Personal consumption has gone up, and many Americans actually feel guilty about their spending and misreport their real-world behavior.
We probably need to acknowledge that for some folks, and for some things, consumption isnt a choice, its a necessity, Nevin Adams, co-director of the Employee Benefit Research Institute Center for Research on Retirement Income, tells EBN. He adds employers need to understand as well that workers have different savings needs, much of which can be facilitated with automatic payroll deduction.
But what can employers do? Options are plentiful when financial wellness programs are centered on reflection of personal assets, a hard look at fiscal responsibilities as well as continued education.
The best advice for employers looking to help their employees with savings would be to offer a retirement savings plan at work, Adams says. If you already offer one, make it easy for people to sign up automatic enrollment is probably the easiest way to make sure the worker takes advantage of the program. And automatically enroll them at a level that is adequate help them maximize the match level, if you have one, and start them at a level that stands a chance of helping them achieve financial security for retirement.
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Automation is also heralded by Erick Carter, a senior resident financial planner at Financial Finesse, an organization that offers financial education and counseling programs to over 600,000 employers at over 500 organizations.
He says the increase in automatic escalation at least gives [employees] the option so that contributions will slowly increase over time.
At Financial Finesse, new research finds that a greater portion of employees are pursuing more assistance in the financial arena by seeking out financial planners. In 2013, nearly half surveyed report having taken risk tolerance assessments and using all federal tax credits and deductions, according to the companys Annual Study on Employee Financial Issues. In terms of technology, Financial Finesse says that the frequency and return usage of its Online Financial Learning Center also jumped.
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What essentially Financial Finesse does is educating employees on the importance of savings, why it is beneficial and why they need to do it, and also, how to manage their day-to-day money to free [it] up to save, says Carter.
This attempt to free up some extra dollars can also relieve some of the associated stress related to finances. In turn, a less stressed worker translates into a more productive workplace.
To the extent of helping them with money management that helps the employee with reducing stress. A lot of people are worried about how are they going to pay their bills and paying off debt, and putting away money in savings, Carter says. [For employers] the things you see right away [are] less employee stress, increased productivity and lower health care costs.
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Adams, who also serves as director of the American Savings Education Program, says that financial wellness programs or traditional financial advisement services offered at the workplace can be a huge employment benefit.
I think a lot of individuals have never been exposed to the basics of budgeting, much less investment decisions or tax planning, he explains. A financial wellness program has the advantage of convenience, being offered at the workplace, generally has the support of your employer, either in terms of promotional and sometimes financial support, and can provide the discipline to focus on things we all know are important, but either lack the time or knowledge to get started.
