Let’s of course not forget the direct correlation between financial and physical wellness supported by countless studies that show the high percentage of missed work days, stress, and emotional instability workers say is tied to monetary concerns.
Let’s also not forget that financial wellness for an employee has an impact on the financial wellness of a company. Workers who retire later because they are financially insecure can increase company expenses through escalated health care costs, higher wages, delayed hiring opportunities, and so on.
Clearly, financial wellbeing for employees requires much more thought and effort from a company than simply paying adequate salaries and reminding people of the importance of putting away a portion of their money toward retirement.
Providing an employee with a defined contribution program such as a 401(k) is an excellent start, but it’s not enough. Despite the tools available and the significant communications efforts aimed at providing important information on saving for retirement, many workers aren’t comfortable with this type of detailed planning. They need to be reminded that they have to save more, not pick winners in the stock market. Therefore, employees need a rational, well thought out retirement savings target. They need a plan to reach that target, and they need routine progress reviews and adjustments to make sure they stay on the right course.
What’s coming to light as a more pragmatic approach to retirement readiness is to view it holistically as a combination of education, savings, and new automated assistance tools, just as preventative care, diet, and exercise all play a part in physical wellness.
This series continues in Part 3, with a look at the problem with “take home pay” in retirement.