Workers Look To Employers For Financial Wellness
The notion of “financial wellness,” and how the workplace – and workplace vendors – fit into it has gained enormous traction in the past couple of years.
But what is financial wellness?
The definition of financial wellness has three parts and they will be explained as part of a session at the 2022 Retirement Industry Conference, sponsored by the Secure Retirement Institute and the Society of Actuaries. Deb Dupont, assistant vice president, institutional retirement research with LIMRA and LOMA, and Greg Ward, director of the Financial Wellness Think Tank with Financial Finesse, will discuss what financial wellness means and wellness and the workplace fit together.
Those three parts of financial wellness are:
- Emotional: Being confident in your financial situation.
- Objective security/current financial situation: Able to withstand unexpected expenses.
- Forward-looking: Able to plan and act for a financially secure future.
LIMRA Secure Retirement Institute research found that job stress was the top daily stressor for consumers in all age groups except baby boomers, who ranked it as their No. 2 stressor. Generation Z was the age group reporting the highest rate of job stress, Dupont said.
Financial wellness has been a strategic focus for LIMRA for the past year or so, she added.
“Our member companies in the industry want to take a more holistic view of wellness than simply financial,” she said. “How does the workplace play into that?”
Dupont said LIMRA researchers looked at stress by age group and gender. Gen Z showed the highest levels of stress while boomers showing the lowest levels. Women showed higher levels of stress than men.
LIMRA also looked at the elements of financial wellness, Dupont said. “Am I confident in my financial situation? Can I withstand an unexpected expense? Do I have money left over at the end of the month? Can I enjoy my life because of the way I manage my money?”
Baby boomers are in much better shape with financial wellness than other generations, she added. Gen Z showed they rank lowest among the generations with financial wellness, but Dupont cautioned that Gen Z has not been in the workforce for very long and many Gen Zers are still in school.
Feeling confident of being able to save enough money for retirement is another component of financial wellness, Dupont said. Of the different age groups studied, 40% of Gen Z said they are not confident of saving enough for retirement while 60% of baby boomers are.
Boomers also are more comfortable with the planning they are able to do than are those of younger generations, Dupont said, and men are more comfortable with their planning then women are.
Obtaining good financial advice is crucial to financial wellness, she said, but baby boomers are less likely than those of other age groups to agree with that. “Perhaps that goes hand in hand with their greater confidence level in their own planning,” she said. However, younger generations are less likely to seek out an advisor, she added, which makes the workplace more important as a source of financial wellness for them.
All ages recognize that workplace benefits are integral to financial wellness, Dupont said, with Generation X and millennials most likely to agree with the importance of benefits.
Younger generations recognize the importance of having a retirement plan offered through the workplace, she noted, but are less likely than their older counterparts to believe it is important for employers to match their workers’ contributions.
Employees feel strongly that employers should be required to offer health insurance, life insurance and retirement plans to their workers, Dupont said. They also believe employers should be required to educate their workers on these benefits.
Employers should offer programs to ease employees’ stress, reported 60% of survey respondents. “There’s a lot of room for employers to enter this space and educate their employees,” Dupont said.
Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on Twitter @INNsusan.
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