Among the many reasons Americans can lose sleep at night, money stress is a major concern. But many employers are alleviating financial worries with the creation of financial wellness programs, which both attract and retain quality candidates. Financial wellness programs aim to help employees manage finances and reduce financial anxiety. Let’s break down of the most common benefits and resources.
A financial advisor can help you create a financial plan for your needs and goals.
What Are Financial Wellness Programs?
Employers may offer financial wellness programs to help their employees improve their finances. Additionally, it’s an employment incentive that can help employees minimize the financial stress in their lives and improve their real financial success. Financial wellness programs can provide training, tools, resources and perks that aid employees throughout their financial journey.
Offering financial wellness programs helps companies stay competitive, especially in a staffing market. In addition, because employer compensation packages are one of the many incentives that attract quality candidates, many companies see the value in creating these programs. In 2019, Gartner, a technological research and consulting firm, predicted that employers offering financial wellness programs would increase 20% by the year 2023.
Examples of Financial Wellness Programs
Your employer could offer a wide range of financial wellness benefits, from resources to help improve your financial literacy to insurance offerings to boosting your retirement savings. Here are a few examples to explain how these plans work.
Employer matching programs
Using an employer’s matching program is a great way to improve your future financial security. Some of the common matching offerings include:
- 401(k) matching programs: If your employer has a retirement savings plan, they may also offer a matching program. With this type of program, your employer will match your contributions up to a certain percentage. For example, some employers may match your contributions up to 6%. This means if you contribute 6% of your salary, they will also put in 6%. Therefore, you are now contributing 12% of your salary.
- 529 match programs: 529 plans help you save for your child’s education. To boost your contributions, employers may match your 529 contributions up to a certain amount. So, you and your children get to benefit from this perk.
- Student loan matching: Roughly 2 million Americans have federal student loan debt, according to the Department of Education. For this reason, some employers help their employees repay their debt by matching their contributions. Some employers, however, may take a different approach by matching this amount with retirement contributions instead of directly repaying the loan. Using this strategy can help you save for retirement while repaying your debt.
Education programs
There are programs available for employees to learn essential information to prepare for financial emergencies with the available employer benefits. There are many variations of programs available that can include some if not all of the following components:
- Credit counseling sessions: Credit counseling sessions help consumers manage debt. For example, some counselors can assist employees with student loan deferments, handling forbearances, and getting approved for an income-driven repayment plan.
- Workshops: The focal point of financial education workshops is to educate employees about credit scores, savings accounts, retirement savings and more. Usually, these sessions are held over lunch with financial advisors from local credit unions and other similar organizations there to run them.
- Financial aid guidance: Employers may provide remote, interactive financial aid guidance to help working parents understand college aid options available such as FAFSA.
Insurance plans
While many companies offer health insurance as an employment incentive, others may provide different insurance offerings to strengthen your asset protection. Some insurance policies can include:
- Long-term care coverage
- Life insurance
- Disability insurance
- Pet insurance
- Umbrella insurance
- Adoption and fertility insurance
Financial assistance programs
Outside of providing insurance, retirement benefits and educating employees, employers may contemplate incorporating programs for financial assistance within the economic well-being strategy for their employees. These are to acknowledge other elements employees might not have thought of that could factor into their finances.
Types of offerings include:
- Medical bill negotiation
- Mortgage assistance
- Stock options
- Relocation assistance
- Health savings accounts (HSA)
- Flexible spending accounts (FSA)
- Career develop stipends
- Deferred compensation plans
- Bonus plans
Other Benefits of Financial Wellness Programs
Your employer may also offer assistance achieving long-term security by connecting you with a financial advisor. These financial professionals can help you create a comprehensive financial plan that touches on wealth management, investments and estate planning.
Other benefits include:
- Will preparation
- Tax preparation
- Gym memberships
- Credit monitoring
- Identity theft protection
- Company car and gas card
- Child assistance
Bottom Line
When it comes to improving your financial well-being, knowledge is power. So, whether your employer offers a financial wellness program or is planning on offering one, you’ll want to become familiar with all of the tools, resources and perks at your disposal. In addition, understanding the best practices for leveraging these programs can better your financial security. Therefore, make sure you’re well-versed to take full advantage of your company’s financial wellness program. And, if you’re looking for a new employment opportunity, make sure to ask any potential employer what benefits are available so you can make the most informed career choice.
Tips on Saving for Retirement
- A financial advisor can help guide your retirement planning. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Even if your employer does offer a 401(k), you may want to diversify your retirement savings vehicles and open an IRA. An IRA, or individual retirement account, isn’t sponsored by your employer. You have to open and fund it entirely yourself, but the upside is that you have more investment options.
Photo credit: ©iStock/dima_sidelnikov, ©iStock/kohei_hara, ©iStock/fizkes