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Benefits of Financial Wellness |
Financial Knowledge Leads to Better Savings Behavior |
The Pension Research Council examined the savings behavior of Federal Reserve System employees within the Thrift Savings Plan and found financial wellness and retirement education can be beneficial even for employees who are already ostensibly knowledgeable about finances.Read more > |
Employees who improve their financial wellness score from 4 to 6, on a 10-point scale, could potentially improve their retirement plan balance by more than 27%, an analysis found.Read more > |
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Financial Wellness Program Strategies |
“One big reason financial wellness programs fail is that they focus on ‘education’ and financial literacy, which simply do not inspire or empower behavioral change,” says Carla Dearing, CEO of financial planning service SUM180. “It’s very tempting to think, ‘If we just show people the steps, they’ll be able to do them.’” She recommends offering programs that incite principles of behavioral finance such as privacy, control and feedback to help employees succeed.Read more > |
Making Financial Wellness ‘Fun’ Could Boost Retirement Savings |
Plan sponsors have been moving away from traditional financial-wellness education methods and utilizing tools like apps and games to help participants manage their finances and prepare for retirement.Read more > |
When asked what is the “single largest influencer when it comes to your workers’ financial decisions,” three in four (74%) of 150 corporate benefits leaders surveyed by the International Foundation of Employee Benefit Plans (IFEBP) pointed to “family members, friends, co-workers or peers.” With this in mind, IFEBP says, employers are adapting their financial education efforts to better fit the needs of their workforce.Read more > |
Financial Finesse’s Generational Research report says financial wellness programs help employees overcome two key biases: “present bias,” the tendency to value satisfaction today over future satisfaction, and “exponential growth bias,” the tendency to neglect the value of compounding. While all generations can benefit from basic money management, debt reduction, and retirement education, each generation learns differently and has different challenges.Read more > |
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