Planning Your Finances

The importance of employee financial wellness

Financial stress is not just a personal issue—it is a pressing business concern with tangible costs for employers. Consequently, employees are increasingly turning to their employers, financial advisors, and group retirement providers for guidance in navigating the unpredictable economy.

This presents a unique opportunity for employers to benefit both their employees and their business simultaneously by considering four key steps of support.

Step 1: Budgeting

Effective budgeting is crucial for financial wellness as it helps employees manage their income and expenses, ensuring they can meet their financial obligations and save for future goals. By creating and adhering to a budget, employees can reduce financial stress, avoid debt, and achieve greater financial stability and peace of mind.

Step 3: Accumulation Planning

Accumulation Planning involves strategies for building wealth over time through savings, investments, and retirement plans. Accumulation planning helps employees prepare for future financial needs, such as buying a home, funding their children’s education, and ensuring a comfortable retirement.

Step 2: Risk Management

This involves identifying and mitigating potential financial risks that could impact employees’ financial stability. Life altering events such as death, catastrophic illness or disability can devastate an individual or families financial future. By implementing effective risk management strategies, including insurance coverage and emergency savings, employees can protect themselves from unforeseen events and maintain their financial security.

Step 4: Preliminary Estate Planning

Basic estate planning includes careful consideration in creating wills, appointing Powers of Attorney, designating beneficiaries, guardianship for children and trustee appointments for managing the assets of minors. By addressing estate planning early, employees can reduce potential legal complications, minimize tax liabilities, and provide peace of mind knowing their affairs are in order.

7 in 10 employees report not saving enough for retirement.

4 out of 5 worry about their finances at work and 2.4 hours is the average amount of time spent on finances at work each month. 1 in 2 of those who worry say they'd be more productive if they weren't so stressed.

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More than four in ten (44%) say retirement is among the top three benefit priorities...

they would like their employer to focus on, making retirement employees’ most commonly cited benefit priority, next to flexible work and health.

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1 Willis Towers Watson – 2022 The future of benefits

2 Willis Towers Watson – 2022 The future of benefits

Financial Security is top of mind for employees young and old, and that sentiment is consistent around the globe.

The most recent Benefits Healthcare Survey uncovered a concerning trend. 39% of employees now cite personal finances as their top stressor, surpassing worries about workload and maintaining work-life balance.1

Nearly three-quarters of Canadian workers are feeling the weight of financial stress. Many employees struggle to leave financial concerns at home, leading to distractions that affect their job performance.2

Is your current plan in line with their urgent need for financial security?

We can even see among the various employee demographics across the globe, retirement consistently ranks in the top three benefit priorities where employees seek employer support the most.

For employees aged 20-39, in 10 out of 12 countries, a more generous Retirement Benefit is ranked as the second or third highest priority for Total Rewards, following a large pay increase and a bonus opportunity.3

For employees aged 40 and above, in 11 out of 12 countries, a more generous Retirement Benefit is ranked as the second highest priority for Total Rewards, following a large pay increase. In the remaining country, it is ranked third, following a bonus opportunity and a large pay increase.4

1 2022 Willis Towers Watson

2 Source: 2022 Benefits Canada Healthcare Survey

3 2022 Willis Towers Watson

4 2022 Willis Towers Watson