Pandemic Reveals Financial Wellness Programs a Necessity

Financial wellness, and the need for employee financial wellness programs, has increasingly gained attention in the past decade. Pre-COVID-19, offering a financial wellness program to employees was considered a value-added benefit, but the coronavirus pandemic suggests it is now an urgent necessity with a major emphasis on emergency savings.

Simply put, financial wellness is the ability to have a healthy financial life. It means your debts are payable and you have ample emergency, college and retirement funds. You are well prepared to handle an unexpected financial crisis. The coronavirus has forever changed our definition of being well prepared and has enhanced the spotlight on an existing problem: too many people are already living paycheck to paycheck.

A recently released survey from First National Bank of Omaha shows that as many as 78% of Americans are living paycheck to paycheck, with about 40% not able to cover an unplanned $400 expense. In addition, 56% have less than $10,000 saved for retirement and 36% have less than $1,000 saved. The average household take-home pay goes towards paying off consumer debt. It is very clear that Americans are undersaved for both retirement and emergencies. The pandemic has exposed workers’ need for financial coaching and for employers to offer financial wellness resources.

Employers already play a vital role in helping employees save, invest and prepare for older age and retirement. Employer-sponsored retirement benefits, such as 401(k) or 403(b) plans, have proven to be highly effective at encouraging savings through the convenience of payroll deductions. Employers can profoundly influence their workers’ financial security and promote planning, guidance and educational resources. Education will need to be about more than just retirement.

At Greenleaf Trust, we see the value of implementing programs to support employees’ financial wellness, including retirement education. Our participant services team is committed to providing our plan participants with the basic knowledge and understanding that is needed to secure a financially secure future.