Financial stress is a growing concern for employees in today’s fast-paced, global economy. This stress can result in reduced productivity, increased absenteeism, and overall dissatisfaction in the workplace. That is why savvy employers recognize the importance of promoting financial wellness beyond traditional 401(k) plans, offering innovative benefits and resources to help employees manage their finances and achieve financial security.
Financial wellness has shifted from a “nice-to-have” benefit to a “need-to-have” employer offering. As employees face increasing financial challenges, employers are looking to provide effective solutions that not only help retain and attract talent but also improve the overall well-being of their workforce.
Now employers are going beyond traditional retirement plans and offering a variety of financial wellness benefits to support their employees in achieving financial stability. Here are ten innovative financial wellness perks that employers are implementing to improve the financial health of their workforce.
1. Emergency Savings Funds
Emergency savings funds (ESAs) are a relatively new benefit that allows employees to automatically contribute a portion of their paycheck to a dedicated savings account. While contributions to ESAs are taxable, employees can access these funds anytime without penalties. These accounts provide employees with a financial safety net and can help prevent reliance on high-interest credit cards or payday loans in times of need.
2. Student Loan Assistance
As student loan debt burdens many employees, companies increasingly offer assistance programs. For example, some employers provide counseling to help employees understand and apply for student loan deferment, forbearance, or refinancing options. Others, like Fidelity, Aetna
3. Financial Education and Planning
Financial planning assistance and coaching are becoming more common among employers, with 35% of companies offering financial planning services and 24% providing financial coaching, according to the Society for Human Resource Management. These services can help employees create comprehensive financial plans, manage personal finances and budgets, and even receive credit counseling or debt management advice.
4. Family-Related Financial Assistance
Employers recognize that financial stress extends beyond the individual and offer benefits to support employees with family-related expenses. This assistance may include childcare or eldercare stipends, discounts, or on-site care. Some companies even provide financial support for fertility treatments, egg-freezing, and adoption expenses.
5. Education Costs
Many employers offer financial assistance for continuing education, such as certifications or degrees, as long as the program is relevant to the employee’s job. Amazon
6. College Fund Assistance
In addition to supporting employees’ education, some companies offer assistance with their children’s college tuition. This may include financial aid application advice or direct contributions to a 529 plan, an investment account used to pay for qualifying educational expenses. It’s important to note that employer contributions to 529 plans are taxable.
7. Home Buying or Rental Assistance
Employer-assisted housing programs help employees purchase or rent homes through various financial assistance options, such as loans for down payments or closing costs, interest rate buy-downs, mortgage guarantee programs, matched savings plans, and rental assistance.
8. Legal Assistance
Legal issues can be time-consuming and costly, so some employers offer legal assistance plans. These plans provide employees access to attorneys for various legal needs, such as estate planning, real estate transactions, family law, or identity theft. While joining the plan may come with a cost, services for covered legal needs are often free.
9. Workplace Life Insurance and Disability Insurance Plans
Group term life insurance and disability insurance are common financial wellness benefits employers provide. These insurance plans offer employees limited coverage at little or no cost, ensuring financial protection in case of unexpected events.
10. Customized Financial Wellness Platforms
Employers increasingly turn to financial wellness platforms like Best Money Moves and LearnLux to provide personalized financial education and resources. These platforms use demographic information, financial stress rankings, and credit history data to deliver targeted content, tools, and solutions to employees, helping them improve their financial confidence and well-being.
The Future of Financial Wellness
As financial stress continues to impact employees, the importance of financial wellness benefits is becoming increasingly apparent. In addition, the SECURE 2.0 Act of 2022 and other legislative changes have raised awareness about the importance of student loan repayment assistance and emergency savings benefits.
It is predicted that by 2026, more than 50% of employers will offer mortgage or rent assistance, credit improvement, and student loan repayment programs, while more than 40% will provide emergency savings fund mechanisms. As a result, employers prioritizing financial wellness benefits will likely have a competitive advantage in attracting and retaining talent. In contrast, those unable to offer such benefits may struggle to maintain workforce and business performance.
Brian Menickella is the founder and managing partner at Beacon Financial Services, a broad-based financial advisory firm based in Wayne, PA.
Securities and Advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC.
This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice.
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