Planning In Volatility

Making the most of employee benefits

by Sharon Scanlon

While inflation and market volatility have consumed the news and altered the economic climate, we are seeing a positive trend emerge — employees are more actively engaged in their finances. This heightened interest provides employers a significant opportunity to ease some of the financial stress created by the economy by offering solutions to safeguard against the unexpected.

Employees have reported feeling uncertain about how to manage through periods of volatility and inflation, which has resulted in decreased emergency and retirement savings. According to research from Lincoln Financial Group, only 31% of employees feel confident they could weather another year of high inflation and still be able to save enough for retirement and nearly half (49%) of participants say their plan’s performance in 2022 has raised concerns about putting more money in this year. Increased daily expenses due to inflation have also impacted employees’ bank accounts. In fact, 35% of workers surveyed spent some or all the money they had in an emergency fund in the past year and 58% of workers have credit card debt, up from 51% in 2021.

The good news is that employees are eager to improve their situation, with 91% saying they’d like to better understand what they can do to protect against the impact of inflation, and 87% saying they’d like to better understand what they can do to weather market volatility. These results provide employers with a tremendous opportunity to offer resources to support their employees’ financial future.

A Well-Rounded Benefits Package

Workplace benefits, including disability, accident or critical illness, provide income protections that can help ease some of the anxiety that comes with an unexpected life event, especially in times of economic volatility. Lincoln’s research shows that 51% of employees are concerned about being able to support themselves or their family in the event of a chronic illness or disability. Without the right protections in place, an accident or illness can derail retirement savings and disrupt one’s ability to provide, leading to increased stress and anxiety. Employer-offered benefits can help protect against unexpected expenses:

• Disability insurance provides paycheck protection, so you won’t lose your income if you are unable to work due to an illness or injury.
• Accident insurance helps pay for expenses that aren’t covered by health insurance, including high deductibles.
• Critical illness insurance provides funds to cover day-to-day expenses while recovering from an illness — including mortgage payments, childcare, food and more.

While the current economic climate may make it more difficult to save, continuing to save in times of volatility can help employees stay on track with their retirement goals. Guaranteed income solutions, like in-plan annuity products, can also help navigate market fluctuations and ease employee concern. According to research, interest in these products is high, with 86% of employees surveyed reporting that they would like to invest their money in a solution that protects them from losses during times of market volatility, even if it means fewer gains when the market is performing well. While retirement may seem like a long way off for some, saving early helps employees get ahead and enjoy the benefits of compound interest. For those further along in their journey, recently expanded catch-up contributions can help get retirement savings back on track.

And employees aren’t the only ones who benefit from a comprehensive benefits package. For employers, benefits offered in the workplace can play a key role in attracting and retaining talent, helping set businesses up for long-term success. These benefits and resources can impact employee retention, with 60% of employees surveyed reporting that being offered group benefits, such as short- and long-term disability insurance, positively impacts their loyalty to an employer.

Emphasis On Financial Wellness

Our current environment provides a unique opportunity for employers to showcase the efforts they have made to protect their employees’ financial future. By offering financial wellness benefits in the workplace, employers have a significant opportunity to improve employees’ financial health and combat stress.

Financial wellness programs include tools to create personalized action plans and improve financial well-being, from spending and saving to debt and protection. Lincoln research shows that of those who have used financial wellness resources, 77% say they’ve had a positive impact, and 69% say the support helped reduce the amount of stress they feel about finances.

Employers can partner with their carrier to identify resources to help improve financial wellness, including resources to help employees tackle student debt, invest and save for the future. These tools equip employees with the resources needed to build strong financial habits, set and meet their goals and improve financial health.

Importance Of Education

While offering financial wellness resources and benefits to employees is important, it is equally important for employers to provide education on how these benefits can help protect against the unexpected in times of volatility.

Offering simple, relevant and personalized information about the benefits available through their employer can help employees make informed decisions and take ownership of their coverage. Cost clarity can also help, as the top concern about benefits enrollment is understanding their cost and value.

Retirement planning can be complex — it’s hard enough to predict how much is needed and how much to save, and deciding which accounts to contribute to and where to invest can be challenging. In fact, nearly two-thirds of retirees surveyed would change the way they planned for retirement if they could and, most commonly, retirees wish they had started saving earlier and saved more for retirement. Offering the right tools, like one-on-one retirement consultations, retirement income projections and calculators, can help employees understand how to make better decisions when it comes to planning and saving for retirement.

Looking Ahead

The current economic environment has made it challenging for employees to stay on top of their financial priorities, causing increased stress and anxiety. More and more, employees are looking to their employers to support them on this journey — whether it’s building emergency savings or planning for retirement.

By offering a well-rounded benefits package including supplemental health offerings and retirement plan options, employers are equipping their employees with the tools needed to plan for their financial future and feel protected during times of uncertainty.

This material is provided by The Lincoln National Life Insurance Company, Fort Wayne, IN, and, in New York, Lincoln Life & Annuity Company of New York, Syracuse, NY, and their applicable affiliates (collectively referred to as “Lincoln”). This material is intended for general use with the public. Lincoln does not provide investment advice, and this material is not intended to provide investment advice. Lincoln has financial interests that are served by the sale of Lincoln programs, products and services.

Lincoln Financial Group is the marketing name for Lincoln National Corporation and its affiliates. Affiliates are separately responsible for their own financial and contractual obligations.

1 Lincoln Financial Group, Wellness@Work: Retirement, 2023

2 Lincoln Financial Group, Wellness@Work: Retirement, 2023

3 Lincoln Financial Group, Wellness@Work: Retirement, 2023

4 Lincoln Financial, Consumer Sentiment Tracker, April 2023

5 Lincoln Financial, Consumer Sentiment Tracker, June 2023

6 Lincoln Financial, Consumer Sentiment Tracker, April 2023

7 Lincoln Financial Group, Wellness@Work: Group Protection, 2022

8 Lincoln Financial Group, Wellness@Work: Retirement, 2023

9 Lincoln Financial Group, Consumer Sentiment Tracker, April 2023

LCN-5816720-071823