Driving Financial Wellness at Work

Wes Collins, senior manager of participant advice services at CAPTRUST, discusses financial wellness areas of focus, broken out by career stage.

Plan participant demand for workplace advice and education is at an all-time high. More than half of employees would like workplace education that will help them improve their financial well-being, and 35% would welcome their employer pushing them to save more.[1]


Financial wellness directly affects productivity on the job, and it isn’t only individuals who lose out when financial well-being is lacking. Employers also feel the strain of a workforce that has trouble making ends meet. A recent PwC survey found the top financial concern for Millennials (62%) and Gen Xers (55%) is not having enough money to cover unexpected expenses. For 52% of Baby Boomers, it is not being able to retire when they want to. Less than half of each generation says their compensation is keeping up with the cost of their living expenses, with this being true for only 26% of Millennials, 36% of Gen Xers and 42% of Boomers.


Personal financial challenges such as credit card debt, the cost of education, and the need to save for retirement have a meaningful impact on overall employee performance. This stress can lead to employee absenteeism, lost productivity and health issues.


What should plan sponsors do to address this situation?


Sponsors should consider rolling out a program that helps their workers understand what financial wellness looks like at different ages and career stages. Providing financial knowledge and personalized advice is often the first and easiest step. The more custom information employees have, the better.


Plan sponsors should explore and invest in age-appropriate advice and financial wellness for employees, and integrate these programs into corporate benefits. It’s critical that the advice be customized. What is suitable financial advice for someone in their 20s is different from the advice appropriate for someone in their 50s.


Plan sponsors can start this process by understanding the various sets of needs among the participant population being served. Let’s take a look at financial wellness areas of focus, broken out by career stage.


Early career. Entering the workforce, paying back student loans, buying a home, navigating debt issues and advancing a career are all financially challenging. There is so much to juggle for this generation, especially money. Sixty percent of Millennials spend more than three hours a week at work dealing with personal financial matters, according to Bank of America’s 2017 report, “Workplace Benefits Report Supplement: A Closer Look at Millennials.”


Younger workers just starting in the workforce or in their early careers are primarily working toward establishing building blocks for long-term financial wellness. Debt management and budgeting are the first steps in that process. If these primarily Millennial workers can become secure in those two areas, it will help them create the capacity to start saving for retirement. Plan sponsors can help them with advice focused on investment recommendations, utilization of any employer match, the basics of health savings accounts (HSAs), the importance of emergency savings, and student loan debt payoff strategies.


Mid-career. This is a time filled with new financial challenges. Plan participants will want to focus on needs such as for a will that includes guardianship provisions for any children they have and for adequate life insurance. At this stage, participants should be saving at least 15%, including the employer match, annually in a 401(k) or similar retirement account.


It’s also important that this age group maximize tax-advantaged accounts for health care—such as an HSA and flexible spending account (FSA)—and child care, respectively, if available. If participants do have children, it’s also the time to fund education accounts for them, even if only in small amounts.


Plan sponsors will want to ensure that participants periodically run retirement projections and evaluate whether they are on track to retire at their desired age. Lastly, it’s always a good idea, as employees’ careers progress and income increases, to encourage them to direct a large portion of any raises or bonuses to various savings goals rather than lifestyle enhancements.


Late career. As an employee nears the end of his career, his main financial goal should be to know when and how he is going to retire. By the time he reaches this stage in life, he will generally want to have built out a holistic plan with his adviser that provides for his lifestyle and replaces his income during retirement.


Employers should encourage their workers ages 50 and older to maximize catch-up contributions to retirement plans and take advantage of other savings opportunities. It’s also important for this group to have a solid understanding of Social Security benefits, along with their projected future health care coverage needs.


Spreading financial wellness across your workforce


Plan sponsors are stepping up to the plate and meeting the demand for financial wellness education through companywide courses, lunch-and-learns, workshops and contests. These activities educate workers and keep them accountable to their financial goals. Many offer a digital portal where employees can access a trove of financial planning information and tools, such as calculators that help them gauge their own financial fitness, as well as give them access to third-party advisers.


Lastly, most companies are not in the business of providing financial wellness education to their employees; they’re in the business of something else. This is where independent, third-party advice can help employees understand where their retirement income will come from. Working with a recordkeeper or an outside firm is one way to show your employees you take a serious interest in their financial health.



Wes Collins, senior manager of participant advice services at CAPTRUST, heads a team that promotes participant advice services and that strategizes with clients on the best ways to effectively help their participants. He also is responsible for many of the training initiatives of the team. Prior to joining the firm in 2010, he worked as a fixed-income trader and brokerage representative for The Vanguard Group. He has worked in the industry since 2006.


This feature is to provide general information only, does not constitute legal or tax advice, and cannot be used or substituted for legal or tax advice. Any opinions of the author do not necessarily reflect the stance of Institutional Shareholder Services (ISS) or its affiliates.

[1]Is Your Retirement Plan Working?,” Principal, 2018.