Much as health insurance evolved beyond a way to get injured workers back on the job, financial benefits in the workplace must evolve, according to Steve Vernon, consulting research scholar at the Stanford Center on Longevity.
Vernon’s findings, reported in the proceedings of The Future of Financial Wellness conference at Stanford University, show that while traditional workplace financial offerings tended to focus on insurance, the ultimate goal should be to move beyond the simple absence of financial hardship and on to the financial security to accomplish an employee’s life goals.
Vernon presented research demonstrating how important a lifetime approach may be to workers. Recent studies show that among today’s baby boomers—those nearest retirement—more than half worry they won’t have enough money to retire. Even among those with more time to prepare, such as Gen X, some 40% worry they won’t have the money to retire.
Just as employers have found value in employees who are healthy, instead of just “not injured,” businesses will find value in having employees who aren’t simply insured, but are actually confident that they are financially prepared.
Employees free from financial stress are more productive. Businesses benefit from a reputation as a good place to work, and, as a worker ages, having the means to retire allows for predictable and appropriate exits (and avoids workers who “retire on the job,” disengaged from their work but too broke to retire).
With a financial wellness program, Vernon said, employers could tailor offerings to each demographic, attracting younger workers with programs to pay off student debt or save for a first house, helping older workers prepare for retirement, and building employee accountability, productivity, and value for the company.
After reviewing a full program of presentations, the proceedings of the conference ultimately highlighted a “lifespan approach” that could be a key to financial wellness.
Basic financial literacy skills: Budgeting, saving, and debt reduction are keys to retirement planning and wealth building.
Financial security over a lifetime: Focus on interim milestones such as student-loan repayment, home buying, saving for a child’s college tuition.
Unexpected life events: Prepare in advance for bumps such as divorce, a child with special needs, or a major illness.
The full proceedings are online at the Stanford Center on Longevity’s website: http://longevity.stanford.edu/
Article courtesy of Transamerica, NewAgeOfAdvice.com
Robert Goldman is a Regional Vice President - Institutional Markets, in the New York Regional Office at Transamerica Retirement Solutions.
He can be reached at Robert.Goldman@transamerica.com.