It’s a fact of life that money can be stressful. Whether it’s making enough of it, managing it, spending it, or saving it, financial matters can cause a lot of headaches. Right now many people are feeling increased levels of financial stress due to the hardships of the pandemic. In fact, in a recent survey PwC found that 63% of employees say that their financial stress has increased since the start of the pandemic. That’s where financial wellness benefits come in.
Defining financial wellness benefits
It’s likely you’ve heard about financial wellness benefits, especially as they increase in popularity with employers. But it can be hard to pinpoint exactly what those benefits might look like, especially with so many options on the market. There are some traditional financial wellness benefits (like retirement accounts) that many people have heard about, and there are some newer options (like financial counseling) that may be new to some people.
Many employees are looking for advice on a broad array of financial matters, including debt management, saving for retirement, investing, doing taxes, and budgeting. Financial counselors can help employees learn how to manage their personal financial situation and make smart decisions with their money.
Credit counseling and financial education programs
Similar to financial counseling, this is a type of program that can offer key educational experiences to your employees so they can learn more about finances and feel more comfortable and confident with their money management.
Student loan repayment options
Student loan debt has ballooned in the past few decades. According to Experian, “Total student loan debt in the U.S. reached a record high of $1.57 trillion in 2020.” Many employees are looking for help managing this debt, which is why loan repayment assistance has become an increasingly popular financial wellness benefit.
Savings accounts with employer matching or funding
529 accounts are tax-advantaged savings accounts that can be used to save money for college. Many millennial employees are having children and thinking about the future, which makes employer contributions to a 529 a very attractive benefit.
401(k)s and Roth 401(k)s are retirement plans that allow employees and employers to contribute money. They have high contribution limits, particularly compared to individual retirement accounts, which make them an important tool for saving for the future.
HSA or FSA otions
HSAs and FSAs are healthcare related accounts that provide big tax advantages for qualified expenses. The type of account you can offer depends on your health plan offerings, as HSAs must be paired with a High Deductible Health Plan (HDHP), so it is a good idea to talk to your health insurance broker to better understand your options.
This is a new kind of financial wellness benefit that has been introduced with the rise of electronic payments and online payroll companies. Some online payroll providers allow your employees to get an advance on their payroll for time they have already worked, which can be a key lifeline for hourly employees or those who live paycheck to paycheck. This can help employees avoid costly and predatory payday loans.
Emergency savings accounts
These accounts are separate savings accounts that help employees cover unexpected expenses, like a surprise medical bill, car, or home repair. They are a relatively new benefit, but one that is becoming increasinlyg popular, especially as a survey by the Federal Reserve found that 40% of Americans do not have enough saved to cover an unexpected $500 expense.
How these benefits help your company
In an increasingly competitive labor market, having a competitive employee benefits package can be the difference between landing the employee of your dreams or losing them to a competitor. Financial wellness benefits can give you the edge you need in your recruiting and hiring.
A great financial wellness program can also help reduce employee turnover. A recent survey by Lively found that 70% of Americans rate health insurance as the most important benefit that employers can offer, above salary. Employees that are happy with your employer benefits package are going to be more likely to stay at your company, especially if other employers aren’t offering the same benefits. They can get a salary anywhere, but unique wellness benefits are much harder to come by.
How these benefits support your employees
Another key benefit of financial wellness is that your employees can feel less financial stress. The bottom line is that financially stressed employees won’t be performing to the best of their ability at work and in their personal life. Offering ways to reduce this employee stress will make your employees healthier, which has a huge impact on every aspect of their life. Employees with less stress can perform better at work and feel better in their day-to-day life. That’s an important reason why your benefits package simply isn’t complete without financial wellness benefits.
Getting started with Lively
To learn more about adding a modern, top-rated HSA or FSA to your benefits package, get in touch with us at Lively.
Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.