Saving for retirement is one of the most important factors behind ensuring a comfortable lifestyle in old age, and encouragingly many working Americans have access to and regularly contribute to an employer-sponsored 401(k) plan. Simply setting aside money, though, is not enough to guarantee a financially secure retirement because detailed projections of potential outlays are also needed. Indeed, this helps people determine early on how much money they will likely have to save in order to achieve their desired standard of living in retirement. Such plans should undergo routine checkups to see if savings goals remain on track and whether initial spending estimates need to be revised higher due to unforeseen life changes.
Unfortunately, many Americans are not sure how to approach proper financial planning and this could partially explain why a growing number of employers are starting to incorporate financial education into their broader wellness initiatives. For example, a study by Alliant found that 40 percent of the employers in its sample provide workers with access to a financial wellness program. Surveyed business managers at these organizations reported that such offerings have benefited their bottom line by alleviating workers’ financial stress, reducing absenteeism, boosting engagement, and increasing productivity. Many financial wellness programs also provide education workshops aimed directly at helping employees plan for the long-term and reach their retirement goals.
This is a needed benefit since an earlier poll conducted by Gallup found that only about one in three (36 percent) non-retired Americans currently have a written financial plan. Seventy percent of all (retired and non-retired) respondents said that they have some sort of financial plan but only 54 percent said that it is a written plan. The written aspect is important because it implies a greater effort put toward estimating old-age income and spending needs. Even better, 49 percent of surveyed Americans with a written financial plan said that they review their plan at least once a year, and 39 percent said that they reassess their plan multiple times each year. Seventy-four percent of these respondents said that they developed their written plan with help from a professional financial advisor.
Sources: Alliant Credit Union, GallupPost author: Charles Couch