The Job You Do

Curing What Ails Middle America

Financial advisors have an opportunity to help alleviate their clients’ money woes

by E. Thomas Foster Jr.

Mr. Foster is head of strategic relationships for retirement plans for Massachusetts Mutual Life Insurance Co. Visit

It’s enough to make you sick.

Middle-income Americans are reporting that financial issues, including struggles to save and prepare for retirement, are literally making them ill.

Ailments such as stress and anxiety, headaches, nausea, insomnia, clenched jaw or grinding teeth are being reported by Middle Americans who say they worry at least once a week about money problems.

While on the surface it seems like a problem for a medical doctor, it’s actually a malady that financial advisors have an opportunity to cure or at least help.  The health problems being reported are due to Middle America’s lack of financial security as identified by the MassMutual Middle America Financial Security Study1 (Middle America Study). Overall, 37 percent of the study’s respondents report feeling “not very” or “not at all” financially secure.”

The research was conducted on behalf of MassMutual by Greenwald & Associates and polled 1,000 working Americans ages 25-65 who earned annual incomes of between $35,000 and $150,000.

While nearly half (48 percent) report an improved sense of financial security during the past year, just as many (48 percent) say they worry about their household’s financial situation at least once a week, according to the Middle America Study. One in four of those who are less affluent, meaning they earn less than $45,000 annually, worry about money every day. Many of these folks participate in employer-sponsored retirement savings plans such as 401(k)s or at least have access to the plans

Anxiety and Insomnia

Study respondents report that concerns about finances have tangible, negative repercussions for their health and personal relationships.  Money worries cause stress (57 percent), impair people’s social life (40 percent), and hurt marriages or romantic relationships (27 percent), according to the study.  Meanwhile, those who worry about money at least once a week or more say their troubles cause health issues such as anxiety, headaches, insomnia or difficulty sleeping, nausea or stomach issues, and clenched jaw or grinding teeth.

Some income levels reported more problems than others and women reported experiencing more headaches and insomnia than men.

Financial insecurity has repercussions for the workplace. Four in 10 Middle Americans (41 percent) said they worry about money at least once a week while at work, the study found. Half (49 percent) of Americans who are less affluent reported carrying their financial baggage to work at least once a week and one in five said they do so every day.

It’s a heavy burden, not just for employees but for employers as well. The health issues employees attribute to personal financial problems may contribute to rising costs for health care, disability leave and lost productivity for employers. How well could you concentrate at work, for instance, if you were worried about paying the rent or making ends meet?
So what’s a financial advisor to do? Short of donning a white coat and stethoscope, that is.

Calling Dr. Retirement

Those surveyed indicate concerns about a wide range of financial issues, especially a lack of preparation for retirement.  Many expressed a need for more education about retirement savings and personal financial management.

Eighty-four percent of respondents earning less than $45,000 annually “strongly agreed” or “somewhat agreed” with the statement that they are behind on preparing for retirement and 55 percent of those earning more than $75,000 annually said the same. Nearly half of the survey respondents were unsure about whom to go to for financial advice or guidance.

Advisors that support retirement plans may have an opportunity to step up educational sessions about retirement savings, investments and even basic money management. Many employers reported they want their advisor to provide more education, according to MassMutual’s 2016 Winning Combination Study2.  It’s clearly a huge need for most employees as well.

When it comes to retirement savings, do your utmost to help retirement savers understand they have time on their side. Many workers may need to start small and build towards attainable goals. Suggesting ways to find savings such as reducing costs for smartphones, premium cable TV channels, dining out and other nonessential expenses may be another way to help. Many people spend money without really thinking about the impact: one in four survey respondents admitted to having a spending problem.

The most important lesson: start sooner rather than later to put the power of compounding to work. Watching their savings grow, even in smaller increments, may improve Middle Americans’ overall sense of financial security, help them understand the benefits of compounding and regular savings, and potentially build on their new savings habits.

Making the Most of Savings

Many Middle Americans have already concluded that they will need to work longer, giving them more time to save for retirement

For those who are behind on retirement savings – seven in 10 overall said they were not saving enough – it may be helpful to point out strategies to make the most of what they can afford to save. Some strategies may involve little or no additional savings on their part:

  • Take advantage of any employer match
    While not all employers match employee contributions, many do. If a retirement plan saver cannot afford to contribute the maximum or close to it, he or she may want to consider saving enough to secure the available maximum in matching contributions.
  • Save pre-tax
    Contributing pre-tax dollars to a 401(k) or similar plan can reduce the saver’s taxable income and can help free up additional dollars for retirement savings. If the saver is already maxing out his or her 401(k) contribution, mitigating the bite of taxes through the use of pre-tax contributions may allow savers to earmark additional dollars to another vehicle such as an IRA, mutual fund, annuity or other financial vehicle.
  • Use the Savers Credit
    The Retirement Savings Contributions Credit (also known as the Saver’s Credit) can be taken for contributions to a 401(k) or other defined contribution plan, a traditional or Roth IRA, SIMPLE IRA, or other tax-qualified plan, subject to certain conditions. The amount of the credit is provided on a sliding scale and determined by adjusted gross income (AGI).  For instance, for the 2017 tax year, a married couple that files their taxes jointly and has an AGI of not more than $37,000 can obtain a credit of 50 percent of their retirement savings. The credit drops to 10 percent of retirement contributions for a married couple filing jointly with an AGI of $40,001–$62,000 and phases out completely for incomes above the latter threshold.3
  • Work longer
    Many Middle Americans have already concluded that they will need to work longer, giving them more time to save for retirement. The good news is that many experienced workers may be in demand, especially those with hard-to-replace skills.
  • Put off taking Social Security
    Postponing Social Security at age 65 or later can boost future payments by 8 percent for every year the income is deferred until age 70, the Social Security Administration reports4. Few investment strategies net such a return, never mind one with a guarantee.
  • Work in retirement
    More than one-third of people who retired within the past five years say that employment is a current source of income, according to research by MassMutual in 2014.5  While the number of people who worked in retirement declines with age, one in five of those who retired 10-15 years ago say they continue to work, which helps augment retirement savings.

Consider enlisting the help of your retirement plan provider, which likely has tools, educational materials and even educational specialists who can lend a hand. Some specialists will even meet one-on-one with employees as well. Coordinate with them to make sure you’re on the same page and promoting positive savings lessons.

But retirement savings is only a start. Employers often look for additional help for their employees to help meet a wider range of financial security needs. Advisors may want to consider incorporating other benefits into their retirement plan practices such as life or disability insurance, critical care or accident coverage. These benefits may be available on a voluntary or employee-paid basis to provide financial support when employees need it most. Because the coverage is available at group rates, it may be affordable and payroll deductible.

Health Improvements

Helping people find ways to build their retirement savings and enhance their financial security may seem like a small step. But providing Middle Americans who feel less-than-financially secure with the tools necessary to improve their financial security may help reduce their stress, make them feel better and improve both their mental, physical and financial health.

In a way, retirement advisors are being asked to become their clients’ financial doctor. You can start by writing a simple prescription for financial wellness:  Save two dollars and call me in the morning. ◊



1 – 2017 MassMutual Middle America Financial Security Study,
2 – 2016 MassMutual Winning Combination Study,
3 – Retirement Savings Contribution Credit,
4 – Social Security, Delayed Retirement,
5 – MassMutual, Hopes, Fears and Reality, 2014,