Do your employees have a disaster plan in place that would cause them to take a loan from their 401(k) or, worse yet, withdraw money from their accounts?
If not, you might consider adding that to the list of benefits you provide your workforce.
Financial awareness and preparedness effect employers. If employees are not prepared for unexpected expenses, they are more likely to be less productive when stressed about their finances and they may need to take money out of their 401(k) prematurely.
Consider: “Financial stress and workplace performance are linked, causing increased absenteeism, loss in productivity and higher health care costs,” according to this ADP blog https://www.adp.com/spark/articles/2018/10/whats-on-your-employees-minds-financial-stress-and-workplace-performance.aspx. “If your employees aren’t as productive as you’d like them to be or maybe as they once were, there might be a dollar sign attached to the problem.”
How might you go about helping your employees create a disaster plan?
A Culture of Financial Wellness
Well, making a disaster plan is something that can be broached at work with the help of a general financial wellness culture throughout the office. To create a culture of financial wellness, try the following:
Bring in experts.
Many companies bring in in-person financial experts to talk to their employees about financial preparedness.
Post literature and resources from reputable sources on your employee website. The literature below are examples of such resources:
- The Red Cross’ “DISASTERS AND FINANCIAL PLANNING: A GUIDE FOR PREPAREDNESS AND RECOVERY” https://www.redcross.org/content/dam/redcross/get-help/pdfs/disasters-and-financial-planning-guide.PDF.
- Department of Homeland Security’s Financial Preparedness https://www.ready.gov/financial-preparedness
- Investopedia’s 10 Ways To Prepare For A Personal Financial Crisis https://www.investopedia.com/articles/pf/11/prepare-for-a-financial-crisis.asp
Variety of Accounts.
Employers can also help employees become more prepared overall by offering a variety of accounts or information about the uses and value of different accounts, such as a 529 plan, a 401(k), 403(b), health savings accounts (HSA), and the like.
Access to Financial Advice.
Employers can also give employees access to bias-free financial advice. HealthyCapital has, among other things, an app that does just that. The app provides quick, easy, one-click advise about one’s financial questions.
Financial Wellness Programs.
Employers could also provide new technological benefit programs that, in general, can give employers the opportunity to provide financial wellness (knowledge about finances) to their employees. HealthyCapital can, for instance, provide employees with projections for healthcare costs in retirement and their income needs in retirement. It can additionally help them to increase their contributions using savings from improved health.
In summary, financial education, advice, and wellness programs provide your employees with a roadmap to successfully making a disaster plan for those unexpected expenses that everyone experiences. HealthyCapital is an excellent tool for employers to give their employees education and assistance. This in the long run will create a successful financial future for employees, one that will last them through retirement.