Author’s note: the following post is from our CEO, Ben Pitts. I’ve spent the last two years speaking with CFOs, Directors of Total Rewards, and other benefits executives about the issue of financial wellness. Together, the founders of MFA have attended industry conferences, participated in expert panels, and have met with consultants, employee healt...
Last week, the Department of Labor (DoL) issued its long-anticipated new fiduciary rule, which greatly expands the definition of which actions require stockbrokers and other investment advisors to act solely in the “best interests” of investors or clients. There has been no shortage of analysis on the new rules and their expected implicati...
While a full half of American workers still don’t have access to either a 401(k) or a pension plan through their employer, those who are covered by a workplace retirement plan have no doubt experienced the ongoing shift from traditional “defined benefit” pension plans to the increasingly-standard “defined contribution” plans, ...
Corporate financial wellness is getting a lot of attention these days, and with good reason. Research reveals that financial issues are the #1 cause of stress for employees. Our daily conversations with human resources executives provide anecdotal support for that research. In addition, HR executives confirm that employees lack comprehensive guidance on p...
Almost guaranteed to improve your career! “Most folks are about as happy as they make up their minds to be.” — Abraham Lincoln Have you ever met someone who was truly, truly happy in the job that they were doing and wondered which came first? Did they develop a talent at their job, and become happy because they were good at it? Or was it the other way...
“Thinking will not overcome fear, but action will.”
— W. Clement Stone
I’ve been an employer before. I was a managing principal at a software company, where we had several employees. We paid them well and provided good benefits. The beer in the office refrigerator probably also helped our employees think that our firm was a good place to work.
As an employer, I was imbued with a pretty strong libertarian streak—I thought that by paying my employees well and giving them a Cadillac healthcare plan (along with various other perks) I was taking care of them financially.
I’m sure I’m not the only employer who has ever done that and thought:
“I’m doing enough, right?”
According to the 2015 LifeCare/FPA Financial Confidence of American Workers Survey, the answer to that question is probably a resounding “no”.
In that survey, the Financial Planning Association — one of the largest associations of Certified Financial Planners in the United States — joined work-life benefits consultancy LifeCare in surveying 1,389 American workers to gauge their feelings about their own personal financial well-being and retirement readiness.
The results were somewhat contradictory, but unsurprising given the overall lack of financial illiteracy that the survey revealed.
The Contradictory Findings
Two main areas stand out in the FPA survey.
First, 67% of the respondents who do not currently save anything for retirement said that after their day-to-day ordinary expenses are taken care of, they didn’t have any money left over to save—they were stretched to their budgetary limits.
Here’s where the contradictions come in: while 57% of respondents said that they felt like they had a solid grip on their everyday finances, a full 40% said that they felt ill-prepared for retirement due to inadequate savings, and 55% reported that they don’t have a coherent retirement plan in place.
If I could sum up the two seemingly contradictory sets of findings into one statement, it would probably go something like this:
“I think I know where my money goes, but I do not know if it goes into the right place for me to have a successful retirement.”
To me, that is like going to the driving range, knowing you can make contact with the ball, but having no idea if the ball is going to land in the fairway or not.
Employees Are Concerned Because Retirement Isn’t the Only Item on Their List
28 hours per month. That’s how much time the average American worker spends researching and dealing with personal financial issues, and the resultant stress could be devastating to employee health and workplace productivity. Indeed, study after study has confirmed that financial stress is one of the greatest sources of lost productivity in the wor...