Income, Longevity & Client Behavior

Fear Factor: Worrying about Financial Wellness

How the industry is developing dynamic tools to educate, and advise, weary clients

by Tom Foster

E. Thomas Foster Jr. is head of strategic relationships for retirement plans for Massachusetts Mutual Life Insurance Co. (MassMutual). Visit

An earthquake or tornado destroys your neighborhood … terrorists attack your community… burglars or thugs invade your home … The news is full of scary events that cause us to worry and fear for our well-being.

But while Middle-class Americans express varying degrees of concern about those situations, what worries them more is money, according to the MassMutual Middle America Financial Security Study1. Adults whose families have annual household incomes of between $35,000 and $150,000 say a financial emergency is one of their top concerns, more so than their health, careers, children or marriage. Even more than natural disasters, terrorist attacks or crime.

Financial concerns are impacting the workplace as the study found that four in ten respondents overall say they bring their money troubles to work with them at least once a week. It’s a problem that employers are paying increasing attention to in 2019 and as a result many are asking for help from financial advisors and benefits providers to solve.

Dynamic Tools

The financial services industry, spotting an opportunity, is busy rolling out dynamic new tools, products and support for employees to access through their workplace as part of a wider effort to enhance financial wellness. Financial advisors who support 401(k)s and other retirement plans have a real opportunity to adapt and expand their practices by meeting a wider set of financial needs and ultimately help enhance workers’ financial wellness, not just today but through their entire journey. In doing so, advisors have the opportunity to build closer relationships with employers by helping them improve the effectiveness of their benefits package and helping employees navigate their financial journey.

In the meantime, daily financial issues seem to be getting in the way of more people saving for retirement. While half of Middle America admits to struggling financially, the MassMutual study found, 72 percent are not saving enough for their so-called “golden years.”

What’s the hurdle between workers and saving more? Why are so many people struggling with their finances and finding it difficult if not impossible to save for retirement? The study pointed to debt as the biggest obstacle to financial security, followed by not having enough income, too many bills, the rising cost of living, and healthcare costs.

New tools are being developed and refined by retirement plan and benefits providers to help workers sort through these issues step by step to better understand their financial situation, prioritize their financial and benefit needs, and create a potential game plan for financial security.  If a worker’s finances are on shaky ground, then an effective tool may serve as a financial Richter scale, warning the user of a pending financial disaster.

More than that, though, the best tools may provide users with a snapshot of their overall financial picture to help them understand where they stand and how to possibly make improvements. Educational information about specific financial concerns is geared to the user’s individual situation. The depth of information may be deeper and more insightful than what is typically available during benefits enrollment. With that information in hand, the user may then use the tool to evaluate specific aspects of his or her finances, including short-term and long-term savings, financial protection needs such as life or disability insurance, medical coverage and other financial goals.

Expanded Benefits Menu

Meanwhile, more employers are offering expanded menus of voluntary benefits to enable employees to meet individual financial needs. While saving in a defined contribution retirement plan such as a 401(k) is voluntary, employers are starting to offer more such voluntary benefits such as life, disability, critical illness and accident insurance, tuition loan repayment programs, budgeting and debt management tools, to name a few.

But given the overall state of Middle America’s financial well-being, not every employee can necessarily afford every product or fulfill every financial need. That’s why it’s important for employees to have access to an easy-to-use, comprehensive financial wellness tool to help prioritize needs based on their personal and family finances and budget.

Generational Behaviors

A younger, single millennial employee who is unmarried and qualifies as a dependent for inclusion on his or her parents’ healthcare coverage may be able to put off obtaining such insurance through his or her employer. A higher priority might be voluntary benefits such as disability insurance and tuition loan repayment, if available.  Contributing to an employer’s retirement plan at this stage would allow the employee to take advantage of the power of compound interest over more years and get a jump-start on saving for retirement. An effective financial wellness tool might be able to identify dollars that the employee could save for retirement. Getting started on the path to financial wellness might eventually encourage the employee to seek help from a financial professional as well.

Money becomes one less concern in a world of other worries. And that typically means more engagement at work...

Meanwhile, a Generation X employee who is married and has young children may want to prioritize healthcare coverage as well as other protection benefits such as life and disability insurance or critical illness and accident coverage.  Access to tools to help with budgeting and debt management, and a college savings program for the children might make sense.  Depending upon the person’s budget, it might be more difficult for him or her to boost retirement savings until other financial priorities are met.

Then there are the baby boomers whose children are grown and who spy retirement on the horizon. While older employees tend to be heavier users of healthcare benefits and thus prioritize them, many may be able to afford to contribute $19,000 — the maximum amount allowable in 2019 — to their employer’s defined contribution retirement plan. Those 50 and older can also earmark another $6,000 to their retirement savings plan as well for a total of $25,000 in 2019. Again, a versatile financial wellness tool could provide the employee with those insights and help identify ways to use his or her benefits budget to boost retirement savings.

The Workplace As ‘Financial Laboratory’?

But does providing access to more tools, benefits and financial resources make a difference? Won’t employees simply pursue their own financial security outside of the workplace? MassMutual’s research shows that the workplace is the resource of choice when it comes to Middle America’s financial needs.

Fifty-eight percent of middle-income workers overall report feeling more secure because of benefits at work, according to the MassMutual Workplace Benefits Study2.  But not everyone feels the same, which may indicate a need for more education.

While 65 percent of upper-middle-income Americans, or those with annual household incomes of $75,000 to $150,000, point to employee benefits as a source of greater financial security, only 42 percent of those with incomes of less than $45,000 agree, the study finds. Those who do not feel as financially secure are less likely to have access to benefits such as a 401(k) or other retirement savings plan, or life, disability, accident or dental insurance, according to the Workplace Benefits study.

More lower- and middle-income workers are likely to say that they wish their employer did more to help them set financial priorities than upper-middle-income workers, the study found. Advisors can play a big role in helping educate employees, especially if they partner with retirement plans and employee benefits providers.

Although only one in four employees is offered financial education at work, MassMutual’s study found, as many as half would welcome additional help or guidance on personal finances from their employer. Moreover, 51 percent expressed a desire for their employer to provide more education about saving for retirement.

Millennials are dramatically more open and interested in receiving help at the workplace. Seven in 10 Millennials would welcome financial planning services and six in 10 would be interested in budgeting assistance at work, according to the study.

When polled, many workers express interest in specific employee benefits. For example, 78 percent of survey respondents said they were “very interested” or “somewhat interested” in disability insurance, MassMutual’s study found, with interest high across all income levels.

While workplace benefits can help employees feel more financially secure, each employee’s personal financial situation is unique. Employers and brokers can help through education and offering a wide range of benefits on a voluntary or employee-paid basis to meet as many individual financial needs as possible.

Looking at the research data, many employees who use a financial wellness tool at the workplace may discover that their financial lives are on shaky ground. But with greater financial insight, customized education and access to more financial resources, Middle America can help build a stronger financial foundation to withstand financial shocks, enhance their overall financial well-being and plan for a secure retirement.

Money becomes one less concern in a world of other worries. And that typically means more engagement at work. ◊




1. MassMutual Middle America Financial Security Study, 2017,
2. MassMutual Workplace Benefits Study,