Research from Fidelity Investments reveals how retirement plan participants define financial wellness and what they need to feel financial stability.
Based on a focus group of 65 participants in Fidelity administered plans and a survey of 483 retirement plan participants, Fidelity found one-third had not heard the term “financial wellness” before participating in the research. Only 12% have heard of financial wellness at their workplace, while most heard of it through the media or elsewhere.
Asked for definitions of “financial wellness,” key themes emerged from participants’ responses, including “being not stressed out about money issues,” “having savings/emergency funds,” and “saving for the future.”
While “not being stressed” and “being on track for retirement” were key conditions of being financially well, being free of debt, having enough income to cover expenses and having an emergency fund all were secondary.
Brian Murphy, SVP of employee insights for Fidelity in Boston, tells PLANSPONSOR the biggest takeaway from the survey is the combination of the diversity of needs among participants with the consistency of emotions.
Financial wellness needs can be age-based, income-based, or based a number of other factors, so any financial wellness solution needs to address the broad spectrum of needs, he says. Murphy gave a few examples:
- A worker living paycheck to paycheck wants to be able to pay bills and have a little left over to save or enjoy; having a budget and emergency savings is important;
- Millennials may also be living paycheck to paycheck, balancing a desire to live in the moment with the need to look forward to expenses such as buying a home; they need to learn how to balance living today with saving for the future; and
- Some employees make good basic financial decisions, but they have trouble with trade-offs between paying down debt, saving for children’s college and saving for the future.
The key emotion for all is feeling a lack of control over near-term decisions, a lack of confidence and a lack of stability. Fidelity says this is true across all demographics and income levels. NEXT: Managing emotions and driving engagement