Financial scarcity is the gap between an employee’s wants and needs and the resources (money) required to get those needs, which can affect mental, physical and emotional health in the long run. Of the more than 10,000 employees AFS 401(k) Retirement Services, a retirement advisory firm, has met, most are only one life event — such as a catastrophic medical incident or premature baby — away from experiencing it.
It’s up to employers to keep their employees protected, said Jim Keenehan, senior consultant, retirement plans at AFS, at a retirement symposium sponsored by the Bethesda, Md., company last week.
Employers are receiving the message, he said. Ninety-two percent of employers responding to a 2017 study by Aon are planning on enhancing financial wellness programs beyond retirement savings mechanisms. For example, combining existing financial literacy education with technology that allows an employee to take a more holistic look at their financial picture. This includes areas such as budgeting skills and emergency savings planning, added Alex Assaley, managing principal at AFS.
“Employees are asking for help,” Keenehan said. “[But] most importantly, it is the right thing to do. Putting in effective financial wellness programs can place an employee on the path to financial freedom.”
The next phase
The challenge — one advisers need to lead — is taking what plan participants have learned so far and combining it with technology that will better understand an employee’s financial life, Assaley said. It’s what he calls financial wellness 2.0.
“A very simple way to jumpstart financial…