The 401k Study You'll Never Forget

November 18, 2016

401k, Financial Wellness

Joel Manzer

401kIn August 2016, Charles Schwab conducted a survey of 1,000 employees between the ages of 25-70 who currently contributed to their retirement plan.[1]

The survey revealed that an employee’s 401k is their primary source of retirement savings.  It is also apparent that they desire help as less than half of those asked know how much they should save for a comfortable retirement.[2] 

70% of those who participated wanted personalized investment advice for their 401(k), and 85% said they would use a financial wellness program that would provide them with education, tools and resources to improve their overall financial health.[3]

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The Anatomy of a Great Financial Wellness Program

November 10, 2016

Financial Wellness

Joel Manzer

financial wellnessOver the past several years we’ve heard the words “Financial Wellness” and more companies are adding a financial wellness program to their available voluntary benefits.  According to the AON Hewitt 2016 Report “56% of employers indicated they are very likely to create or focus on the financial well-being of employees in ways that expand beyond retirement decisions in 2016.”1

Why should you make having a Financial Wellness Program a priority?

Financial challenges are one of the leading causes of employee stress.  When employees have tools that are available to help alleviate their stress they make better financial decisions that lead a more stable lifestyle which benefits a company in the following ways:

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9 Compelling Reasons Why Your Employees Need Financial Wellness

43903959_l.jpgThis year, PwC’s Employee Financial Wellness Survey incorporated the views of 1,600 Full-time employed adults, and it marks the first time a decline in specific areas associated with employee financial wellness.[1]

Although the topic of Financial Wellness has been a hot topic within the voluntary benefit industry for the past several years, the biggest issue is associated with financial stress – which has increased to 52% in 2016.  The bottom line, according to the PwC survey, is that “financial wellness is emerging as a key factor in an employee’s overall well-being.[2]

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How Technology is Changing How We Deliver Financial Education

Financial EducationWe’ve come a long way in addressing financial education.   Gone are the days where we read articles and take courses in basic money management.  Over the past several years, technology has been developed to assist consumers in learning about financial wellness and making more informed decisions.

However, the stigma associated with money management can be rather stressful by itself and let’s face it – not as much fun as we’d like to it to be.

However addressing the issue of financial wellness is a priority that many need to face in today’s economy and technology is now making the concept of money management more fun and engaging. Online tools are now regularly available to help employees understand the fundamentals of managing their finances, while at the same time encouraging improved fiscal behaviors.

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Employee Financial Stress May Be Costing Your Customers


41317619_l.jpgTo say that Employees are stressed about their finances is an understatement, and their stress could be seriously impacting your customers. According to Time.com, “Americans are more worried about their finances than ever, and it’s interfering with our ability to do our jobs.”[1]

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Improving Communications with Millennials Regarding Voluntary Benefits

56851222_l.jpgOur world is constantly changing and our future leaders will be from the millennial generation.  This demographic was generally born between 1982 and 2004 and, for the most part, does not know what life was like before the Internet.   It is expected by 2025, that over 75% of our workforce will be comprised of millennials.[1]

Attracting Millennials to the workplace is usually accomplished by offering up-to-date technology as well as a flexible work environment, as these tend to fulfill their personal and professional needs. Employers have been using a series of voluntary benefits to meet many of these needs, including financial education.  However, the challenge with voluntary benefits is that millennials aren’t really excited about them.[2]  The irony here is that they are more likely to admit they don’t know about their benefits than other workers, and are open to seeking benefits from entities other than their employers.[3]

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401(k) Loans: The Good, The Bad and The Ugly

October 05, 2016

loan, 401k

Joel Manzer

3182161_l.jpgAs a business owner, there may be times when an employee may turn to you to ask for help, such as an advance in pay, in order to address a particular hardship.  Of course you want to help, but lending money to an employee should only be considered after all other options are pursued.  There are risks and rewards associated with helping an employee in times of need, many can be associated with being legally compliant, which we share here:  “Employer Lending: Exposing Risks and Rewards[1]

There are other options that are available without becoming a lender – such as a 401(k) loan.  

According to SBA.gov,  If the employee has an account in your 401(k) and the plan allows loans, the business doesn’t have to become a lender. Instead, the employee can borrow up to 50% of his/her account balance (up to a maximum of $50,000). The plan must charge a reasonable rate of interest and repayment must be made in level payments over a period of no more than five years (there’s an exception to this repayment period for loans to buy homes). But caution the employee that if he or she leaves the job—voluntarily or otherwise—the loan must be repaid in full (usually within 30 or 60 days). The failure to do this results in having the outstanding balance treated as a taxable distribution; if the employee is under age 59-1/2, the distribution is taxable and subject to a 10% penalty. Find details about plan loans from the IRS[2]

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3 Ways a Financial Wellness Program Can Help Your Business Grow

September 28, 2016

Financial Wellness

Joel Manzer

24863464_ml.jpgMany companies are expanding their voluntary benefit options to include a financial wellness program. 

Similar to a physical wellness program, which encourages weight loss and health screenings, most financial wellness programs include a financial education platform that educates employees in money management and encourages their efforts through direct results.

Here are 3 ways that a financial wellness program can improve your business:

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How Successful Companies Make the Most of Their Employees

September 15, 2016

Financial Wellness

Joel Manzer

HomeDepotVest.jpgWhen Home Depot’s HR staff noticed employees were struggling with personal finances, they discovered that “only about half of the employees were participating in the company’s direct deposit program and instead, were cashing their paychecks at check-cashing services because they did not have checking accounts. Others were taking out loans against their 401(k) plans, making early withdrawals from their stock purchase plans, or selling their company stock as soon as they purchased it at the end of the year. Home Depot launched a basic financial education program that featured workbooks and videos on topics [such as] developing a savings plan, understanding credit and your credit report, working with checking and savings accounts, and getting a loan.[1]

Financial struggles continue for millions of working Americans.  Even though employers may have a desire to assist employees with a financial wellness program, a lack of knowledge on the effects of financial challenges could adversely impact their efforts. 

Understanding how an individual employee’s financial wellness could benefit an organization is vital to the development of a company’s successful Financial Wellness Program. 

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Time to Focus on Employee Financial Wellness

10670478_ml.jpgBusinesses count on their employees to effectively and productively service their clientele on a daily basis, regardless of industry, title, or position.  However, when an employee is overwhelmed with personal financial matters, their work performance may suffer, adversely affecting your company’s ability to retain its clientele.

While there may be other factors that contributed to the loss of a client, an employee’s distraction over personal financial matters and resulting decline in work performance may have significantly contributed to the situation. According to a study, employees spend at least 3 hours per week, on average, dealing with their finances at work[1].  It could be as simple as making sure a bill is paid on time or something more significant and time-consuming that impacts their work day.  The bottom line is that their financial stress can have major, unplanned consequences on your business.

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