Betterment teams with Lumity on retirement, financial wellness benefits | EBA
If the pandemic has taught employers anything, it is that the cookie cutter’s benefits are not enough to keep employees happy and safe, especially when it comes to their financial well-being. Employees are looking for more robust performances that will help them meet today’s challenges while protecting their future.
Betterment’s 401 (k) business has partnered with Lumity, a social benefits and health insurance marketplace, to offer a retirement plan and a range of financial wellness tools. By partnering with Betterment, Lumity makes it easy for employers to offer their employees a robust 401 (k) plan without ignoring their other financial goals.
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“During our 2022 benefit planning meetings with our customers, financial wellbeing is the focus, so the Betterment and Lumity partnership made perfect sense,” said Amit Ahluwalia, Lumity’s national practice manager for employee benefits, in a press release. “There is a great alignment of values between our two companies and a shared commitment to providing employers and employees with a better benefit experience.”
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Finance is the number one source of stress for employees – 54% of employees surveyed by PwC said they were most stressed about finance or money. The outbreak of the COVID-19 pandemic didn’t help, but the crisis has shown how terribly unprepared employees are for any type of financial emergency, as 38% of employees have saved less than $ 1,000, according to PwC.
When it comes to retirement, employees are even worse off: 22% of employees have saved less than $ 5,000 for retirement, according to a study by Northwestern Mutual. TIAA recommends that the average worker invest 10 to 15% of their annual income in retirement.
Beyond the 401 (k), employers must think about the financial health of their employees and provide benefits that will help them secure their present and future financial plans.
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“During COVID-19, many people across the country are pondering their financial stability,” said Kristen Carlisle, general manager of Betterment for Business. “The retirement plan goes beyond a 401 (k). This is usually the first starting point someone has when considering long-term financial planning, but it shouldn’t be the only stopping point. “
Lumity will have access to Betterment’s financial planning resources, including a digital investment platform that assesses an employee’s overall financial health and provides resources and advice on how to maintain a healthy financial position and build a solid 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 benefits of a financially more stable workforce.
“When you think about the emotional stress many employees experience on their finances, you can also measure it from a productivity standpoint,” says Carlisle. “When then [employers] can help them on their way, it is an enormous net advantage if you think about keeping and really developing the talents that you have in the company. “