Treating financial wellness

Ian Freeman wasn’t sure he would see his 50th birthday. The life struggles and inner torment caused others to tell him it wasn’t likely.

“What is interesting about that is, I didn’t do drugs,” Freeman recalled. “I didn’t mind having a drink, but I really didn’t drink. I didn’t do drugs. I didn’t smoke. I didn’t gamble. I didn’t do any of the other things that get people in trouble. And here I was being told I wasn’t going to see my 50th birthday.”

Mental illness issues, which he called “significant ones,” caused Freeman to struggle through a dark chapter before making it out the other side. He wrote a book, coming out this summer, detailing his journey.

“That journey, and especially in our world, with the stress we deal with in our journey, with rejection, with dealing with purpose, with self-doubt, with all the things that we have — I was just hopeful to tell that story,” Freeman said.

With more than 38 years of experience as a financial advisor, nearly all of them with Northwestern Mutual, Freeman is familiar with clients in financial distress.

“Financial wellness” is more than just a buzzword of the moment. LIMRA calls it “one of the biggest challenges for our industry and our nation.” A glance at some key statistics explains why.

Seventy-nine percent of employees say they want workplace help “managing my financial future,” according to LIMRA wellness survey data released earlier this year. It is the No. 1 ranked wellness need cited by employees.

LIMRA findings correlate strongly with an Allianz Life 2025 retirement study, which found that only 70% of Americans feel confident in their financial future—down from 83% in 2020.

Confidence in meeting retirement savings goals is even lower at 61%, with just over half (55%) saying they’re saving enough in a retirement account—the lowest percentage in five years, Allianz found.

‘Connected to so many other areas’

More than half (57%) of LIMRA respondents said they are “often distracted” at work by financial problems, by far exceeding distractions from physical or emotional concerns.

“It’s connected to so many other areas of wellness,” said Deb Dupont, assistant vice president, retirement plans research at LIMRA. “How happy are you if you’re financially distressed? It can absolutely impact your emotional and your physical wellness. It impacts your and your family’s financial stability, your ability to enjoy life, your ability to plan for the future, to be secure.”

LIMRA defines financial wellness as “being confident in your financial situation, able to withstand unexpected expenses, and ... able to plan for a financially secure future.” Employee benefits help offset financial concerns and include health insurance, a retirement plan, paid time off and wellness programs.

LIMRA first assessed financial wellness in 2022 and is repeating the survey every two years. The most recent survey comes at a perilous time for Americans. While the effects of the pandemic are still being felt, respondents are facing education debt, rising inflation, housing shortages, and increased pricing on groceries and other consumer goods, LIMRA said.

“Financial wellness dropped by 11%,” Dupont said. “Physical and emotional were like a 5% or 6% drop. Financial wellness now is a little bit lower than the other types of wellness, but they’re so deeply interconnected as well, you can’t look at any one of them in a vacuum.”

Workers who use a workplace wellness program — whether to improve financial, emotional or physical/health — those who do participate in such programs report that their workplace benefits are significantly more effective in relieving stress, LIMRA found.

The most commonly offered wellness education features the management of work-life balance, while the most in-
demand but unavailable are education about managing stress and health, nutrition, and work-life balance.

Breakdown by generation

LIMRA’s financial wellness survey helps researchers identify trends among specific demographics or generations. The data can help employers attract and retain workers by offering attractive benefits.

Millennials and Gen X are more stressed by job/career situations and by maintaining work-life balance, LIMRA found. Baby boomers, the oldest workers surveyed, are significantly less likely to use physical/health-related wellness programs.

Women are more likely than men to report that they would use wellness support if offered by their employers, especially financial wellness, the survey revealed.

LIMRA research shows employee satisfaction with wellness programs is very high at 80% or more. These programs can improve worker productivity and also help with employee retention, “making it a smart investment for employers,” LIMRA noted.

“If there are financial things in your life, that’s going to create emotional stress,” Dupont said. “Your blood pressure can go up. It bleeds and feeds into your emotional and physical states of well-being.”

Minority populations report some of the lowest financial wellness scores in the latest LIMRA survey. On a 10-point scale, retirees reported the highest financial wellness (6.33), with those earning $250,000 or more annually right behind them (6.25).

At the other end, Native American populations (3.4), the unemployed (3.94) and those earning less than $25,000 annually (4.19) reported the most financial stress. Women (4.64), African Americans (4.61) and people with only a high school education (4.32) all scored below the survey mean of 4.95.

“Different populations will have different starting points on that wellness scale,” Dupont explained. “Younger individuals, younger consumers and certainly younger workers will score a little bit lower on the scale.”

Stressful times in general

Many day-to-day stressors come with life in 2025 and, when applied to household finances, create a picture of uncertainty, Freeman noted.

Current generations of Americans are the first to be in full control of their retirement savings as the migration from defined benefit to defined contribution is essentially complete. That comes with decisions about 401(k) investment and management.

“One of the things we tend to ask people is, ‘Well, do you have a pension?’” Freeman said. “Most people will say no. So, the next question is, ‘Would you like one?’ In that case, you could help them plan toward something like that and understand that income trumps most things in retirement, because if you don’t have to think about paying your bills, there’s less anxiety and stress.”

The state of the economy under President Donald Trump is another source of financial uncertainty. Markets are oscillating to the extreme in response to the Trump administration’s tariffs and other policies. Inflation continues to linger in the background as analysts revise growth projections downward.

On the plus side, Congress continues to embrace legislation to make it easier to include annuities inside retirement plans. And advisors are warming up to fee-based annuities. These headlines give Americans reason to feel better about their financial wellness because they see a path to guaranteed income, Freeman said.

“What’s it worth to have a piece of your income coming in that you don’t have to think about or manage when you’re old?” he asked. “What’s it worth so that a check keeps coming in? And that’s the part that we talk about as much as anything, and that resonates more with people than almost anything else.”

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.