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How Companies Can Supplement Student Loan Forgiveness

How Companies Can Supplement Student Loan Forgiveness

by | Sep 27, 2022 | Blog

How companies can supplement student loan forgiveness. Student loan forgiveness is coming, but it’s not a perfect solution for all employees. Here’s how to support your team as loan forgiveness goes into effect.

In August 2022, the Biden administration announced the rollout of their student loan relief program. The program is designed to help up to 43 million borrowers, but it doesn’t support everyone the same way.

Companies can help fill in the gaps. Learn more about how the plan affects different borrowers and how companies can supplement the government program.

Who qualifies for student loan forgiveness?

According to the Department of Education, two types of borrowers are eligible for relief: Pell Grant recipients and individuals earning less than $125,000 annually.

  • Pell Grant recipients are eligible for up to $20,000 in debt cancellation, whereas
  • Borrowers earning less than $125,000 ($250,000 per household) are eligible for up to $10,000 in debt cancellation

Employees that have worked in public service (federal, state, local and tribal government or a non-profit organization) for at least 10 years, even if not consecutively, may be eligible for the Public Service Loan Forgiveness program — which can eliminate all of a borrower’s student debt. For more information, see the White House’s website.

Here are 3 innovative ways companies can supplement student loan forgiveness for all:

The skyrocketing student loan debt crisis affects people differently — for some people it affects them directly, for others it may impact how where they educate their kids. Here are some ways companies can help expand the impact of student loan relief.

1. Invest in financial wellness tools to supplement student loan forgiveness

Student loan payments are set to resume in January 2023 and for many borrowers, it’ll be the first time that they’ve made payments in over two years. It can be difficult making the adjustment to repayment, especially when student loans haven’t been a line item in Americans’ budgets for so long.

With financial wellness tools, employees can learn how to re-integrate student loans into their monthly budgets, while balancing other financial goals (such as homeownership or paying off credit card debt). Budget calculators and other debt management tools can help employees identify margins in their budgets and work toward financial wellness. 

2. Create (or update) existing student loan benefits

According to the Employee Benefit Research Institute, 17% of employers offer student debt assistance and about 30% “plan to offer” such benefits, yet a big gap still exists in terms of benefits offered. To fill this gap some companies have offered flexible plans. 

For instance, Fortune 100 company Abbott allows employees to redirect what would be 401(k) contributions toward their student loans and still receive Abbott’s 5% retirement contribution. This allows companies to support employees with student loans, while ensuring employees without student loans don’t miss out on benefits.

If your company currently offers student loan benefits, think about updating them. Some companies have expanded into offering academic scholarships to their employees’ children — this is especially helpful for employees who may not have student debt themselves but are planning to support their college-aged children.

3. Provide financial advising to employees to help navigate student loan forgiveness

Looking deeper into Biden’s plan, the administration is vying to change how people repay their loans. For example, the administration has proposed that borrowers pay 5% of their income each month in repayments, compared to the previous 10%. 

In addition, the Department of Education proposed a rule to cover a borrower’s unpaid monthly interest, as long as they make their monthly payments. This is to curtail the exponential growth of loan balances, due to compounding interest fees. With a financial advisor, employees can learn how to navigate these changes and understand what they may mean for their financial situation.

Need a financial wellness solution for your workforce? Try Best Money Moves!

Best Money Moves is a financial wellness solution designed to help dial down employees’ most top-of-mind financial stresses. As a comprehensive financial well-being solution, Best Money Moves offers 1:1 money coaching, budgeting tools and other resources to improve employee financial wellbeing. Our AI platform, with a human-centered design, is easy to use and fit for employees of any age. 

Whether it be college planning or securing a mortgage, Best Money Moves can guide employees through the most difficult financial times and topics. Our dedicated resources, partner offerings and 700+ article library make Best Money Moves a leading benefit in bettering employee financial wellness. 

To learn more about Best Money Moves Financial Wellness Platform, let’s schedule a call. Contact us and we’ll reach out to you soon.

4 Ways to Help All Employees Prepare for Retirement

4 Ways to Help All Employees Prepare for Retirement

by | Sep 6, 2022 | Blog

4 ways to help all employees prepare for retirement. Data suggests that most U.S. households are behind on retirement savings. Here’s how companies can help their employees prepare for retirement. 

As a large number of Americans approach retirement age, many worry about rising costs. Employers are worried, too — 75% of employers fear that employees don’t have enough retirement savings, according to a TIAA survey and another 64% worry that employees may outlive their savings.

Learn how companies can help all employees — from new hires to those about to retire — prepare for retirement and financial stability in future.

About 8 in 10 pre-retirees cannot afford to retire

Most pre-retirees, or people 50-64 years old, do not have enough savings for retirement. In fact, according to a McKinsey study, over 80% of U.S. pre-retiree households are financially unprepared for retirement.

However, the actual percentage may be higher. This is because 1/3 of people have a false sense of confidence around their retirement preparedness, per the same McKinsey study.

Unforeseen and external factors can keep people from reaching their retirement goals, or even stop them from making retirement a priority. Here are three common challenges pre-retirees face, as they consider retirement:

  • Inflation is on the rise.
    Overtime, inflation can erode the purchasing power of the dollar — meaning the same dollar today won’t buy as many goods in the future. In turn, this can make retirement more expensive, as the dollar becomes devalued. It also means that people will have to save more now to account for future losses during retirement.
  • Focusing on other financial goals.
    Some people are focused on paying off student loan or credit card debt, as opposed to saving for retirement. Others may be looking to buy a home or just simply make ends meet — for this month. Regardless of one’s situation, not everyone’s focus is on retirement and not everyone prioritizes financial goals in the same way.
  • Unable to afford long-term care.
    The older people get, the more assistance they may need with daily activities and care. According to a Health Affairs research article, by 2029, 60% of seniors will have limited mobility and 20% will have a high need for health care and functional assistance. However, more than half won’t be able to afford the care they need.

4 ways to help all employees prepare for retirement:

Here are 4 ways companies can help their entire workforce prepare for retirement:

1. Offer a holistic financial wellness program.

Preparing for retirement requires more than just saving, it requires intentional planning and sometimes advising. However, not everyone can afford access to these resources. 

Consider investing in a holistic financial wellness program, which helps employees reach both short-term and long-term financial goals. Regardless of an employee’s situation or income level, a quality financial wellness program will provide personalized advice, for the near-term and long-term.

2. Consider auto-enrollment to encourage all employees to prepare for retirement

Auto enrollment is a company program that automatically enrolls all employees in a 401(k) or another retirement plan. The goal of auto enrollment is to increase employee participation in retirement benefits, but it also helps employees save earlier, and longer over time. A Principal survey found that 84% of employees say the key reason why they started saving for retirement so early is because they were auto enrolled by their firm.

3. Help employees prepare for retirement by educating them on their retirement benefits

Moving can be costly, especially when moving out of state for a new job. For instance, in the Chicago, Ill. metro area, the median asking rent is $2454 per month, according to Redfin data, and $4000 in the Boston and New York metro areas.  

To help reduce the financial burden of moving and housing, some leading companies have invested in relocation support for employees (e.g., company-sponsored moving services, subsidies or even temporary corporate housing). By offering relocation benefits, companies can support housing security for all employees, while themselves apart from the competition.

4. Start a company match program

A popular incentive companies use to get employees to save for retirement is by starting a company match program. When an employee contributes to their retirement fund, under a company match program, their employer will contribute the same amount, or in other words, “match” the contribution. This can help employees reach their financial long-term goals, with the financial support of their firm.

Need a financial wellness solution for your team? Try Best Money Moves!

Best Money Moves is a mobile-first financial wellness solution designed to help employees meet their most top-of-mind financial goals. With budgeting tools and personalized money coaching, users can easily receive comprehensive financial advice right from their phones.

Focused on user-friendliness, Best Money Moves is designed to bring financial wellness resources right to the fingertips of employees. Our dedicated resources, partner offerings and 700+ article library make Best Money Moves a leading benefit in improving employee financial wellbeing.

To learn more about Best Money Moves Financial Wellness Platform, let’s schedule a call. Contact us and we’ll reach out to you soon.

U.S. Rent’s on the Rise: How to Fight Housing Insecurity for All Employees

U.S. Rent’s on the Rise: How to Fight Housing Insecurity for All Employees

by | Aug 17, 2022 | Blog

U.S. rent’s on the rise: How to fight housing insecurity for all employees. Help your employees combat housing insecurity with financial education resources and other strategies. 

Whether you’re buying or renting, housing is less affordable today than it was a year ago. Rental prices have risen 15%, according to Redfin data, and the Federal Reserve recently announced another interest rate hike, which will raise the cost of mortgages. As a result, more people are facing housing insecurity.

Increasing housing costs affect everyone from minimum wage employees to six-figure executives. Learn more about how housing insecurity may be hurting your workforce and how to support secure housing for all.

What is housing insecurity?

Housing insecurity is an umbrella term for the different housing-related problems people have (including, but not limited to affordability, safety, quality and security). 

Housing insecurity may look different from person to person. Today, over 3.5 million people suffer from housing insecurity, according to the National Alliance to End Homelessness, which covers a broad spectrum of issues and situations.

3 ways companies can fight housing insecurity for all:

Housing insecurity affects most workforces across America and with rents still rising, even more people may become impacted. Luckily, companies can help all employees build a future of financial wellness and housing security in three key ways:

1. Provide financial wellness and budgeting tools.

Although low-wage employees have been disproportionately affected by rent hikes, employees across the income ladder have been impacted, too. By investing in robust financial wellness resources, companies can help ensure housing security for all employees. 

Money coaching, budgeting tools and other financial advice can help employees navigate new rent hikes and adjust their budget, regardless of an employee’s living situation or income level. Financial wellness resources are to people reach their most personal financial goals, whether it’s homeownership or simply making ends meet.

2. Allow remote/hybrid work to stay.

Across America, living in the city or business districts tends to be more expensive than surrounding cities or suburbs. With remote and hybrid work, employees are given newfound flexibility in how they make housing decisions. 

By preserving remote and hybrid work models, companies can help employees work toward sustainable housing situations that they can afford long term. Instead of prioritizing being close to the office or city center, employees can prioritize affordability and security when choosing where to live. Moreover, remote and hybrid work models help employees save money by commuting less.

3. Offer relocation benefits.

Moving can be costly, especially when moving out of state for a new job. For instance, in the Chicago, Ill. metro area, the median asking rent is $2454 per month, according to Redfin data, and $4000 in the Boston and New York metro areas.  

To help reduce the financial burden of moving and housing, some leading companies have invested in relocation support for employees (e.g., company-sponsored moving services, subsidies or even temporary corporate housing). By offering relocation benefits, companies can support housing security for all employees, while themselves apart from the competition.

Financial wellness is an investment, but it doesn’t have to be costly. Need a top-notch, budget-friendly solution? Try Best Money Moves!

Best Money Moves is a financial wellness solution designed to help dial down employees’ most top-of-mind financial stresses. As a comprehensive financial well-being solution, Best Money Moves offers 1:1 money coaching, budgeting tools and other resources to improve employee financial wellbeing. Our AI platform, with a human-centered design, is easy to use and fit for employees of any age. 

Whether it be college planning or securing a mortgage, Best Money Moves can guide employees through the most difficult financial times and topics. Our dedicated resources, partner offerings and 700+ article library make Best Money Moves a leading benefit in bettering employee financial wellness. 

To learn more about Best Money Moves Financial Wellness Platform, let’s schedule a call. Contact us and we’ll reach out to you soon.

Rainy Day Fund: Helping Employees Weather Financial Uncertainty

Rainy Day Fund: Helping Employees Weather Financial Uncertainty

by | Jul 26, 2022 | Blog

Rainy day fund: Helping employees weather financial uncertainty. A surprising number of employees don’t have enough savings to cover unexpected expenses. Here are 4 ways to help employees build a rainy day fund.

Almost one in five employees cannot cover a $400 emergency expense without using a credit card, according to the Social Policy Institute at Washington University, and almost as many would have to borrow money from family or friends. Having a rainy day fund can help people cover low-cost emergency expenses, without disrupting monthly budgets or accruing more debt. 

Here are 4 ways to help employees weather economic hardship with a rainy day fund.

statistic about need for rainy day fund

Rainy day fund vs. emergency fund

Although similar, rainy day funds and emergency funds slightly differ in two distinct ways: the size of the savings and the intended use of the savings. 

Rainy day funds do not have a set amount, but they tend to carry anywhere from $200 to over $1000 in savings. Instead, emergency funds should contain about three to six months’ worth of living expenses. This is because rainy day funds are typically used for small, non-recurring payments, like an unexpected car repair or surprise parking ticket. 

On the other hand, emergency funds should be used to cover large, unanticipated emergencies, like hefty medical expenses or home repairs. In the event of unforeseen job loss, emergency funds can help cover monthly necessities like rent, utilities and food.

4 ways to help employees build a rainy day fund

Rainy day funds can help employees enjoy a higher level of financial wellbeing and security. In the event of an emergency or economic downturn, employees can be assured that they have a financial cushion to help them weather financial uncertainty.  

1. Start a company match program to help employees build a rainy day fund.

Company match programs can help encourage employees to save. Moreover, they can also help direct employees on where to save. For instance, employees may be more likely to funnel their savings to their 401(k) account if they know that the funds will be matched by their employer.

Instead of just matching retirement contributions or philanthropic donations, consider applying the company match model to other accounts like rainy day funds. This can help employees at all income levels build a financial cushion and improve their financial security.

2. Invest in financial advisors.

Building a rainy day fund doesn’t happen overnight, it takes time and planning. And for some employees that planning is best done with a financial advisor. 

There is no clear-cut amount one should have in their rainy day fund, but with a financial advisor, employees can develop a target amount that works best for them. Regardless of one’s financial situation or level of income, a quality financial advisor will offer personalized solutions fit for any employee’s circumstance. 

3. Provide financial wellness resources and programs.

Beyond financial advising, there’s a whole suite of financial wellness resources that can help employees prepare for financial hiccups. For instance, budgeting tools are an effective way to help employees break down penny-by-penny what money is incoming and outgoing. Budget mapping can also help employees find opportunities to lower their expenses and increase their savings for a rainy day.

4. Offer access to affordable lines of credit and loans for when a rainy day fund isn’t enough.

Rainy day funds grow overtime, but what if some employees need an immediate solution to a financial emergency? Firms can provide an extra layer of financial support by making affordable lines of credit and loans accessible to employees.

Looking for an easy-to-use financial wellness solution? Give Best Money Moves a try!

Best Money Moves is a mobile-first financial wellness solution designed to help employees dial down their financial stress and meet their most top-of-mind financial goals. With budgeting tools, strategic partnerships and 1:1 money coaching, Best Money Moves offers users easy, compressive financial advice right from their phones. 

Best Money Moves is designed to guide employees through the most difficult financial times and topics. Our dedicated resources, partner offerings and 700+ article library make Best Money Moves a leading benefit in bettering employee financial wellness.

To learn more about Best Money Moves Financial Wellness Platform, let’s schedule a call. Contact us and we’ll reach out to you soon.

Most Americans Live Paycheck-To-Paycheck. Here’s How Employers Can Help

Most Americans Live Paycheck-To-Paycheck. Here’s How Employers Can Help

by | Jul 19, 2022 | Blog

Most Americans live paycheck-to-paycheck. Here’s how employers can help. With inflation the highest it’s been since the 1980s, more and more families are living paycheck-to-paycheck. What can employers do to help their teams?

Inflation has caused food, gas and housing prices to skyrocket. Between May 2021 and May 2022, inflation hit 8.6% — the highest increase since December 1981, according to the Bureau of Labor Statistics — and economists are unsure when prices may fall.

Trying to make ends meet, about 60% Americans are living paycheck-to-paycheck, according to a LendingClub report, making it the primary financial lifestyle in the U.S.

Living check-to-check isn’t sustainable — it leaves people susceptible to increased debt and high-stress levels. Here are 4 ways companies can help employees manage rising inflation and create viable money habits for the future.

1. Offer budgeting tools and 1:1 money coaching to help employees living paycheck-to-paycheck.

Even with a high income, poor budgeting or not budgeting at all can create a paycheck-to-paycheck lifestyle. For instance, although 7 in 10 Americans have a budget, only 25% have detailed budget, according to a TIAA report. Without a detailed budget, it is difficult to accurately keep track of how much money is coming in and going out each month.

To help employees break with a paycheck-to-paycheck lifestyle, companies can offer budgeting tools and personalized money coaching. These resources are to help employees focus on necessitates and better allocate their money, regardless of their income level. Moreover, it can help identify savings gaps or where to cut down spending.

2. Provide student loan repayment assistance.

Since the federal student loan pause started in 2020, repayment has not been top-of-mind for most Americans. However, this is expected to change starting August 31, 2022 — when student loan repayment, interest and collections pause is scheduled to expire.  This means millions of Americans will have to reintegrate student loan payments into their monthly budget, but with rising inflation, many are worried if they can afford to resume payment. 

By providing student loan repayment assistance, firms can demonstrate a commitment to employee financial wellness and wellbeing. Not only will this help employees lower their student loan debt, but it will also help them weather inflation and financial stress.

3. Invest in mental health resources for those living paycheck-to-paycheck.

Money stress does not function in a vacuum — it can bring on emotional stress, physical stress and even wear down someone’s mental health. According to TIAA, 59% of Americans carry financial stress and with prices on the rise, this number may grow. 

To help dial down stress levels and support all-around employee wellbeing, firms are investing mental health resources like talk therapy and meditation apps. Consider ways your company can make mental health resources more affordable and accessible for employees at all paygrades.

4. Expand financial literacy and education opportunities.

With the right tools and resources, companies can help employees strengthen their financial wellbeing and knowledge, simultaneously. At every budget, there are ways institute financial wellness programming and resources, whether it be tax filing workshops or retirement planning seminars. 

Companies are most successful when they listen to the wants and needs of their own employees, then creatively follow through in their financial wellness offerings and approach. When searching for a quality financial wellness program, try to avoid one-size-fits-all solutions and keep an eye out for customized services (e.g., 1:1 money coaching, mortgage and loan calculators and other personalized solutions).

Need a top-notch, budget-friendly financial wellness program? Try Best Money Moves!

Best Money Moves is a mobile-first financial wellness solution designed to help employees dial down their financial stress and meet their most top-of-mind financial goals. With budgeting tools and personalized money coaching, users can easily receive compressive financial advice right from their phones. 

Best Money Moves is designed to guide employees through the most difficult financial times and topics. Our dedicated resources, partner offerings and 700+ article library make Best Money Moves a leading benefit in bettering employee financial wellness.

To learn more about Best Money Moves Financial Wellness Platform, let’s schedule a call. Contact us and we’ll reach out to you soon.