Financial wellness is a lot like a sport, according to the results in the latest Financial Finesse Year in Review. The more you practice, the better you do.
Employees who repeatedly engaged with a financial planner through Financial Finesse, for example, were more likely to have an emergency fund, pay off monthly credit card bills in full, and be confident about their investments and retirement savings than employees who had fewer interactions with a planner or used only online sources. Repeated interactions were defined as five or more within a year.
"We are big believers that coaching helps motivate people," said Cynthia Meyer, a financial planner at Financial Finesse, which provides financial education and planning at workplaces as part of employee benefit programs.
But even those employees who frequently met with a planner or talked with one over phone still seemed to have work to do on their finances. Only 48% of them said they were on track to reach their income goal for retirement despite the fact that 98% contributed to a 401(k) plan at work.
The decline in stock prices last year coupled with a mere 2% growth in real wages — which are adjusted for inflation — likely contributed to a failure to save enough for retirement.
Overall, only 22% of employees who participated in the survey reported being on track for retirement, which leaves nearly eight in 10 failing to do so.
Just under half reported having an emergency fund to pay bills for a few months if they lose their job, and 40% were confident that their asset investment allocations were appropriate. In almost all cases, the percentages of financial preparedness for retirement, emergencies, bill payments and so on increased with age and income. Those 65 or older with incomes of $200,000 or more tended to be in better financial shape than those younger and poorer.
