While workplace retirement plans are becoming an expectation for employees, the results of a new survey show there are multiple areas where savers are seeking additional support.
In fact, according to Vestwell’s annual Savings Industry Report, four emerging trends for 2024 all point to a growing need for more comprehensive financial wellness solutions, including that:
- savers are increasingly seeking more personalized financial wellness solutions;
- workplace retirement plans have moved from perk to prerequisite;
- saver demand continues to grow for more comprehensive and inclusive workplace financial wellness benefits; and
- employer-sponsored education savings benefits are gaining momentum in response to student debt challenges.
The results, which are based on a nationwide survey of 1,200 employees conducted during the summer and fall of 2023, illustrate the future of financial wellness and workplace savings—and how employers and financial advisors can align their offerings with evolving employee priorities, the firm suggests.
For employers, this shift represents an opportunity to become champions of holistic financial wellness, the report notes. Employers can play a pivotal role in reducing their employees' financial stress by integrating education savings benefits, establishing employer-sponsored emergency savings accounts (ESAs), and offering access to health savings accounts (HSAs).
“Employees are increasingly viewing financial wellness offerings as a ‘must-have’ in today’s workplace environment. With inflation fears and uncertain economic outlooks affecting retirement goals, employers and advisors have a huge opportunity to enhance their offerings beyond the traditional 401(k),” said Aaron Schumm, founder and CEO of Vestwell.
By adopting these solutions, businesses can offer a variety of programs, empowering employees to make informed choices and positioning themselves as leaders in a competitive job market, the report further suggests. Financial advisors also have a vital role in guiding employers through the nuances of these expanded offerings, along with the legislative changes brought on by the SECURE 2.0 Act.
Workplace Retirement Benefits
According to the survey, employees are increasingly expecting retirement benefits from their employers:
- 85% of respondents expect their employer to offer retirement benefits.
- 89% of those surveyed would be more likely to continue working for an employer that offered a retirement benefit.
Education Savings Benefits
Employees are also increasingly looking for employers to offer expanded financial wellness benefits. In this case, the survey found that:
- 93% of survey respondents with student loans reported that their student debt has affected their ability to save;
- 74% of those with student loans agree that they would be more likely to continue working for an employer that offered student loan-related benefits; and
- 73% placed some level of importance on having a 529 Education Savings Account in their workplace benefits package.
“The student debt crisis continues to create barriers for Americans looking to save for retirement. By offering the latest savings solutions to their employees, employers can enhance retention and employee wellbeing,” added Schumm. “If we want to help people save for retirement, we must also provide holistic financial wellness benefits that reduce these barriers to savings.”
Personalized Financial Wellness Solutions
Meanwhile, a growing number of savers are seeking personalized financial wellness solutions through financial advisors, managed accounts, and digital tools, the report further notes. Here, the survey found that:
- 41% of respondents plan to work with a financial advisor in the future; and
- 94% of respondents think a tool that offers digital personalized investment suggestions would be valuable.
Inclusive Financial Wellness Benefits
Vestwell’s report also highlights the increased demand by employees to address an emergency savings shortfall. According to the findings:
- 38% of respondents reported less than $1,000 in emergency savings;
- nearly 70% of respondents expressed willingness to participate in an ESA; and
- 87% of employees placed some level of importance on having access to an HSA in the workplace.
“Advisors should actively consult with their employer clients on the benefits and implementation of these valuable savings vehicles. As we transition into 2024, the concept of the ‘next best dollar’ takes on a broader meaning, with savers looking beyond traditional retirement accounts to more diverse financial wellness solutions,” the report further emphasized in a concluding observation.
