Running Your Business

Fostering Employee Financial Wellness: Encouraging Employees of All Generations to Save

  • Generation X needs help saving for retirement, and they're already behind
  • Millennials might benefit from plans that incentivize saving for retirement with student loan repayment
  • Generation Z is ready to learn and would likely enjoy financial wellness programs
Posted by October 25, 2019

When employees are stressed about money, the last thing they’re doing is focusing on work. And since only 1 in 4 Americans could cover a $400 surprise expense, the savings crisis in this country is something employers can’t afford to ignore.

But money is a sensitive subject, so how can you inspire employees of all generations to embrace the habit of saving without offending them or overstepping? By understanding their unique financial concerns and providing resources based on different life stages, you can foster employee financial wellness in a positive, respectful fashion.

Helping Generation X Tackle Debt

Generation X employees are struggling, even though many have finally paid off their student debt. They have more credit card debt than any other generation, are underprepared for retirement, and have on average less than three months of emergency savings. They’re also saving for their children’s college funds.

Simple salary increases can help this generation save. Generous 401(k)s and other retirement benefits are important, too. Retirement catch-up rules let people age 50 and older contribute up to $6,000 more into their 401(k)s, for example.

Gen X employees also need better financial education. Offer classes that teach budgeting, credit card debt repayment and how to use a retirement calculator. Saving even $25 a week can make a big difference. Employers can also encourage saving by providing a health plan that’s generous to children and dependents.

Supporting Millennials Through Loan Struggles

Millennials’ debt tends to be in credit cards and student loans. They carry an average of $36,000 in debt, spending more than one-third of their income every month on paying that debt off. The rising cost of housing often exacerbates this saving problem. Many have nothing saved for retirement, although nearly half have at least $15,000 in savings and say they want to save for retirement.

Millennials will benefit from classes that teach good habits for reducing debt over time so they can afford homes and retirement plans. Employers might also consider introducing plans that help them pay down student debt if employees agree to also put some money toward their retirement.

Reaching Out to Generation Z

Generation Z employees are just starting to repay student debt. But, in contrast with their older counterparts, this generation is becoming known for being savers. That’s why programs like a life-cycle fund may appeal to Gen Zers. These tie to a retirement year and start out aggressively, becoming conservative over time. These funds can provide a good way to begin retirement planning, even if your young employees ultimately contribute to a 401(k).

They might also benefit from a high-deductible health plan with a health savings account (HSA.) Since younger employees tend to be healthier, they can use the money saved on premiums toward retirement or debt.

In general, Generation Zers like to learn and will appreciate financial wellness programs. Offer workshops and debt assistance programs that use digital tools, such as budgeting apps, that Gen Z will find intuitive.

More Ways Leadership Can Promote Employee Financial Wellness

Employers should monitor legal developments related to saving. For example, the Family Savings Act (FSA) could give a retirement boost to employees of different ages. Employees could use an FSA for college expenses, child expenses or their retirement plans.

You can also offer employee assistance programs for confidential counseling and work-related discounts that can improve their health, such as gym discounts. By promoting wellness in the workplace, it can help employees save on health care costs and free up more money for retirement savings.

Financial wellness education will go a long way, but remember to routinely check the pulse of your workforce. Gauging whether or not employees are happy with their salaries, for example, can shed light on why staffers may be stressed or are leaving your company. You can send out anonymous surveys, but keep an open-door policy to discuss everything—yes, even money—and help your employees thrive.

Looking for tools and resources on promoting financial wellness within your organization? Explore these articles on money management from United Concordia Dental.

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