LizStevens, Author at Best Money Moves

What Does Financial Wellness Look Like for Women?

by LizStevens | Sep 7, 2018 | Blog

Pay equity is a huge barrier to women’s financial wellness in the workplace, but it isn’t the only one. Most women haven’t used retirement calculators and don’t have backup plans if forced into retirement. They’re not going to ask for help, but employers who provide the right tools can help them help themselves.

Everyone knows: Women make up 46.8 percent of the American labor market, but they still earn an average of 20 percent less than men in the same position. Pay isn’t equitable by any stretch of the imagination.

Even in situations where women and men are offered the same job, women are initially offered salaries up to 45 percent less than what men are offered, according to research from Hired. Hired’s research underscores how critical it is for women to advocate for themselves in negotiations until legislation and corporate policies better support pay equity.

Pay equity isn’t the only issue women face when it comes to financial wellness. Research from Transamerica Center found that less than 10 percent of women have used a retirement calculator and barely 20 percent had a backup plan if they were forced into retirement sooner than expected, either because of job loss, health issues or family obligations.

Why? An argument posed in a MarketWatch article claims that “societal norms and cultural messages undermine [women’s] ability to gain financial literacy and investment expertise.” Research shows that for women, finances, especially issues with personal finances, are generally associated with emotions of embarrassment, shame and fear. Even if women know they need to be more financially literate, they might not ask for help in gaining the knowledge.

Companies know they have a serious problem when it comes to women, pay equity and financial wellness. While both men and women feel financial stress, women feel higher levels of it. And, it causes more complications in their work lives.

That’s where there’s an opportunity for employers to help. Employer-sponsored financial wellness programs like Best Money Moves can bypass cultural barriers and social norms to give women access to the tools they need to measure their financial stress, learn how to manage their money around issues ranging from student loans to mortgages, elder care to relationship issues, and get on track with saving for retirement. The best part about employer-sponsored financial wellness programs is that it takes away any shame or embarrassment associated with asking for help and simply provides the best tools for employees to help themselves.

Employers might also consider adding policies that pledge equal pay for equal work, especially if they’re in the process of recruiting more women. And with unemployment at 3.9 percent (nearly an all-time low), it doesn’t hurt to work on policies that will attract a demographic that makes up nearly half of the workforce.

Best Money Moves Founder/CEO Ilyce Glink will be giving her expert insight on this topic at the “Women, Pay Equity and Financial Wellness” panel at the 2018 HR Technology Conference in Las Vegas on Tuesday, September 11 at 10:30 AM.

Best Money Moves will be at the 2018 HR Technology Conference in Las Vegas this September 11-14. Stop by booth #753 to learn how you can improve your company and your employees’ financial health.

First Look at the Future of Financial Wellness

by LizStevens | Sep 5, 2018 | Blog

Financial wellness has generated a lot of buzz recently and with millions of dollars pouring into FinTech development it’s time to take the first look at the future of financial wellness through the lens of a recent Senate hearing.

On August 21st the Senate Health, Education, Labor and Pensions Subcommittee (HELP) held a hearing on Primary Health and Retirement Security. It featured a roundtable discussion on “Financial Literacy: The Starting Point for a Secure Retirement” that focused on the effectiveness and future of employer-sponsored financial wellness programs.

“Although we are in the early stages of assessing the impact of these programs, we are seeing encouraging results in terms of both engagement and the actions individuals take to improve their financial wellness after engaging with digital and/or on-site financial wellness services,” Vishal Jain, a VP in Prudential Financial’s Workplace Solutions Group, testified.

Lynn Dudley, SVO, Global Retirement & Compensation Policy at the American Benefits Council noted the areas in which companies are seeking to help their employees. In addition to helping employees deal with student debt and setup education savings programs for their children, like Section 529 plans, employers are also helping employees develop emergency saving funds (since roughly half of Americans can’t afford an unexpected expense like an emergency transmission repair). Dudley also mentioned the recent IRS private letter ruling that might make it easier for more companies to help their employees with student debt.

Scott Astrada, Federal Advocacy Director at the Center for Responsible Lending, was critical of payday lending programs because consumers can easily become trapped in a cycle of debt that affects their retirement savings efforts. Interest rates on payday loans can be as high as 400 percent on an annual basis. Astrada believes state interest rate caps could offer some relief to those who utilize payday loan services.

Future financial wellness programs will take advantage of technology to streamline communications. Specifically, the electronic delivery of retirement plan documents could enhance benefits communications.

“In particular, legislation that further encourages and facilitates the use of auto-enrollment and auto-escalation can enhance both retirement plan participation and savings rates. And, provisions that remove impediments to the inclusion of guaranteed lifetime income solutions as part of a retirement plan can better ensure employees have access to the products they need to effectively manage investment and longevity risks during their retirement years,” Jain testified in support of the Retirement Enhancement and Savings Act (RESA) and further legislation.

Do You Know How Unprepared Employees Really Are?

by LizStevens | Aug 28, 2018 | Blog

Long-term healthcare is expensive and although most Americans will need it, it’s surprising to know how unprepared employees really are.

Long-term healthcare is a tough topic to discuss because it forces people to confront their mortality, but new research from Moll Law Group underscores the importance of saving for the costs of long-term care, like a nursing home or assisted living.

More than 60 percent of Americans have nothing saved for long-term care. Why? Less than half of Americans think they’ll need it. Unfortunately, 70 percent of Americans will.

That means there are millions of people that are seriously unprepared for future healthcare expenses and some of them are your employees.

Housing costs for long-term care are astronomical. Average costs for assisted living are $45,000, semi-private nursing homes are $87,775, and private nursing homes are $97,455. These housing costs are a far stretch from the $25,000 in savings Americans thought would be enough to cover long-term care.

This isn’t just a crisis for the future, it’s a concern many face presently. A new survey from Bankrate found that “For younger baby boomers (ages 54 to 63), money is the top concern keeping them up at night. Thirty-nine percent say financial worries occasionally keep them from falling asleep.” Younger baby boomers are wrestling with high costs for education, housing, and they have aging parents to worry about. All of these factors pull them further from their retirement goals and increase their financial stress.

The process and associated costs of aging don’t need to be unexpected, but often (at least for half of those surveyed by Moll Law Group) the decision to place a loved one in long-term care is unexpected. Although there’s no knowing if or when it will happen, by understanding the likelihood and estimated expenses families can make the right decision without as much financial strain

It’s time to stop avoiding the inevitable and start preparing for unfortunate events that are likely to happen later in life. Employers should encourage employees to contribute to their 401(k) program and offer an employee match. It’s worthwhile to re-approach healthcare and retirement plans to see where employers can better help employees tackle the incredible cost burdens they, or a close family member, will most likely encounter.

Why Are Millennials so Distracted at Work?

by LizStevens | Aug 28, 2018 | Blog

Financial stress is a huge work distraction for Millennials in debt and it’s costing the American economy billions. The statistics on student loan debt in this article have been updated as of February 20, 2020.

Millennials are now the largest generation in the American labor force and they’re distracted by an overwhelming amount of debt. Human resource departments are overwhelmed with solving new issues around financial stress that Millennials are bringing to the office every day.

Around 44.7 million out of 171.3 million American adults have student loan debt and the total amount of outstanding student loan debt passed $1.5 trillion in 2020. The average monthly student loan payment is nearly $400 and roughly 10 percent of borrowers have defaulted on their student loans.

Most millennials have nothing saved for retirement and of those that do, research from E-Trade revealed that 60 percent have already taken an early withdrawal from their 401(k). Nearly half of them use credit cards for monthly necessities they couldn’t afford otherwise.

Millennials are also falling behind when it comes to major life events like getting married and buying a home. All of this affects their work performance, including productivity, retention and turnover, unexplained absences, and presenteeism.

According to a PwC study, almost 60 percent of millennials are financially stressed. Money is a huge issue for them. Bank of America found they spend an average of 4 hours a week on personal finances at work. Close to 20 percent of them have missed days at work due to financial stress.

The American Psychological Association found that financial stress is responsible for 40 percent of turnover and 60 percent of workplace accidents. More than 20 percent of Millennials have changed jobs in the past year (a number 3x higher than those outside that demographic) and Gallup estimates Millennial turnover costs the American economy close to $30 billion per year. It’s advantageous for employers to help employees reduce financial stress to take back productivity and reduce absenteeism, turnover and workplace accidents.

One thing experts agree on: Millennials want help navigating their financial futures. Over 90 percent of Millennials surveyed by Bank of America say they would participate in a financial education program provided by their employer. In the same survey, roughly 80 percent of Millennials say their employer was influential in getting them to save for retirement. According to Willis Towers Watson research, employees are looking for financial wellness tools to track spending, saving, assess their financial position, and set financial goals.

With an extremely tight labor market, employers have become highly motivated to address their Millennial employees’ desire to gain financial wellness. What the early adopters of best-in-class financial wellness programs have begun to see is that greater employee financial wellness also improves productivity and retention, and helps them stay competitive in a tight labor market.

As part of a larger financial wellness program, some companies have instituted a student loan benefit and the IRS approved tax-free employer matched 401(k) contributions for student loan repayments in 2018. The Society of Human Resources (SHRM) reported over 50 percent of U.S. companies offered financial wellness programs in 2019, more than doubling the less than 25 percent who did so in 2015.

Even though more employers are offering financial wellness programs it doesn’t mean employees are using them. In other words, if you offer a financial wellness program that isn’t sophisticated, mobile-first, in the cloud, that offers different kinds of assessment tools and personalized information and solutions, it may well get overlooked in the sea of other benefit paperwork that has to be reviewed and managed.

For increased employee engagement select a financial wellness program, like Best Money Moves, that has the tools, information, and functionality your employees need. Best Money Moves is a mobile-first service that offers budgeting, resource articles, confidential counseling, free credit score, and personalized information and solutions for employees to use to measure and dial down their financial stress.

All of which will help your employees settle down and get back to work.

If you want to learn more about how Best Money Moves can bring financial wellness to your company download our whitepapers and sign up for a demonstration here.

10 Quick Highlights from SHRM’s 2018 Benefits Report

by LizStevens | Aug 21, 2018 | Blog

SHRM’s 2018 employee benefits report is out and we’ve got the top 10 highlights on topics like healthcare, retirement, paid leave, and wellness programs.

Society of Human Resource Management (SHRM)’s 2018 Employee Benefits report is here just in time for National Wellness Month!

Here are our quick 10 takeaways:

Healthcare is Essential. An impressive 95 percent of companies with less than 50 full-time employees provide some form of healthcare coverage even though they aren’t obligated to.
Keep it Casual. More than 60 percent of organizations offer casual dress benefits. The most popular benefit is one day per week when employees are welcome to “dress down.”
Referral Rewards. Employee referral bonuses increased by 10 percent (to 51%) since 2014. Low unemployment and tight competition makes it that much harder to find quality hires, so why not reward great employees for great referrals?
Investment Retirement Advice. Over half of organizations offer either one-on-one or online investment retirement advice to their employees to help reduce stress concerning retirement readiness.
Wellness Challenges Work. Companies hosting competitions and challenges grew 10 percent over the last year. Competitions and challenges can be effective tools to increase engagement with wellness benefits.
Flexibility Bonus Benefits. Flexible work arrangements are a win-win. Employees experience a better work-life balance. Employers get a reduction of “real estate” costs and are better suited to match customer demands of a 24/7 culture.
Tech Benefit Trends. More than half of organizations offer company-owned smartphones for business and personal use. Surprisingly, almost 20 percent of companies offer free computers for employees’ personal use.
Smoking Costs. Nearly 20 percent of organizations charge a higher premium for healthcare coverage of employees who smoke because of the numerous health risks smoking poses.
Unused Paid Leave. Employees fear falling behind, don’t believe anyone else will step in while they were away, or want to show how dedicated they are to their job. Encouraging employees to use vacation time may reduce turnover and its associated costs.
Stress Management Matters. Stress can be detrimental to productivity, and there’s no shortage of things for Americans to stress about, so it makes sense that companies offering onsite stress management programs as a benefit tripled over the past 5 years.

Effective wellness benefits lower stress, create a better work-life balance and give employees the chance to relax on their off time so they return with higher job satisfaction and improved productivity. Take advantage of National Wellness Month as an opportunity to review your current wellness plan and determine what the best benefits are for your employees.