Financial wellness optimism HR opportunity
Employees are more focused on saving and retirement – and relying on their employer’s help, a new report shows.
According to a new survey by Schwab Retirement Plan Services, employee confidence in meeting retirement goals has risen sharply since last year, as has their appetite for financial advice and help from their employer.
The provider’s annual nationwide survey of 401 (k) plan participants found that more than half (53%) of its 1,000 workers are more likely to meet their retirement goals, compared with 37% in 2020 – a positive sign after more than one Year of financial turmoil and uncertainty caused by the pandemic. The vast majority (91%) of respondents feel either very or fairly good about their financial health.
More positive news? The pandemic has resulted in more employees prioritizing financial savings and goals. Workers generally plan to save more (48%), increase their 401 (k) contribution rates (36%), invest more outside their 401 (k) (35%), and pay off debts (34%).
“COVID has really affected the way employees deal with finances,” said Catherine Golladay, head of Schwab Workplace Financial Services. “They think about saving and spending and see a greater need for financial advice. For many, the most trusted personal financial resources are those offered to them by their employer. This is a great opportunity for employers to engage their employees in education and to raise awareness of benefits that can help them achieve financial security. “
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Despite their optimism, employees still face challenges in saving for retirement, including market volatility (32%), unexpected expenses (29%), monthly expenses (27%), education expenses (21%) and credit card debt (20%). This leaves employers more leeway to strengthen and improve their offers.
In particular, the main areas of retirement planning that participants need help with are calculating a retirement goal (44%), advice on investing a 401 (k) (39%) to figure out how to generate income in retirement (35%) . and anticipation of taxes on retirement (35%), according to the survey.
The pandemic solidified a multi-year trend towards more virtual retirement planning that has proven popular with workers and employers, Golladay says. “We have also seen that employees prefer training on more holistic subjects versus just plan-specific training, which means that employees are asking their employers for help with their overall financial situation. The pandemic has taught us that workers prefer to receive training in the location of their choice, on the device of their choice, and at the time of their choice. We don’t see this trend slowing and employers should embrace it. “
Although the pandemic has undoubtedly put the spotlight on financial offerings in the workplace, Golladay predicts these benefits will only become more important going forward – in part because of worker demand as the job market heats up and more workers consider leaving their employers.
“Employees are attentive, which is a great opportunity for employers to promote current financial offers in the workplace and also evaluate future needs of their workforce,” she says.
Kathryn Mayer is the performance editor of HRE and chair of the Health & Benefits Leadership Conference. She has covered accomplishments for nearly a decade, and her stories have won multiple awards, including a Jesse H. Neal Award and honors from the American Society of Business Publication Editors and the National Federation of Press Women. She holds bachelor’s and master’s degrees from the University of Denver. She can be reached at [email protected]