Financial wellness mark singer
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-Presented by-
Mark Singer CFP®, AIF® Best Selling Author & Founder of The Financial Literacy Toolbox
Greater Boston Corporate Wellness Forum 152 The Lynnway, Lynn, MA 01902
781-599-5009
WWCMA 2014 Conference Delivering the Financial Wellness your Employees Need
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Audience Survey Question
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“Companies put ‘the cart before the horse’ in emphasizing
employee investment education. What employees first need
to do is to straighten out their personal financial mess.”
– Mark Nadler, Economist, Professor at Ashland University
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Financial Wellness Gap
A Lengthy Journey
ENROLLMENT
RETIREMENT
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Why it is financially smart
TO BE PROACTIVE… 10/21/2014 6
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INCREASE THE BOTTOM LINE by Helping Distressed Employees
During Challenging Financial Times 10/21/2014 7
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Employee Personal Finances
And The Bottom-line
Financially Illiterate adults do not manage their personal
finances very well…
And they do not save and invest enough for a financially
successful retirement.
This contributes to lower productivity as well as higher health
care costs.
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9%
39%
33%
16%
3%
Extremelyknowledgeable
Fairlyknowledgeable Somewhatknowledgeable
Slightlyknowledgeable
Notatallknowledgeable
Are Your Employees Preparing?
“People who fail to plan for retirement have half the
wealth of people who do” Dr. Olivia S. Mitchell – Pension Research Council
The Participant Magazine (2012). Annual SSGA 2012 Participant Survey Retrieved from
http://www.ssga.com/definedcontribution/us/docs/KnowledgePower%20SSgADC_The%20Participant02.
Employee Knowledge about Financial Matters
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Let’s Talk About…
Employee Personal Finances
Employer Bottom Line
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Employee Personal Finances
Retirement Saving Realities
Participation in and deferral rates to retirement savings plans
are inadequate
Most are not saving enough for retirement
Workplace education and advice programs have been
underutilized
Millions of employees say they cannot afford to save for
retirement, and 1 in 4 say credit card debt is a reason
Employees do not know how to help themselves
Employers do not understand the value of providing their
employees easy access to the best mix of quality financial
programs
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AND The Lack Of Financial Literacy Is
THE MAJOR REASON Why Employees Do Not Save For Retirement
“Financial Literacy” Is Knowledge About
Spending Plans
Credit Management
Savings
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30 MILLION AMERICAN
WORKERS – 1 in 4 –
report they are seriously
financially distressed and
dissatisfied with their personal
finances.
“These distractions and resulting
levels of stress affect EEs health
& productivity and perpetuate a
myopic view of the future”
Financially Stressed Employees =
Unhealthy & Unproductive Employees
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Price Waterhouse Company (2014.) Annual Price Waterhouse Financial
Wellness Survey Retried from: http://www.pwc.com/en_US/us/private-
company-services/publications/assets/pwc-employee-financial-wellness-
survey-2014-results.pdf
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EE Financial Stress Rising
61% Dealing with
Financial Stress
Of those,
56%
Cite Stress Level
INCREASED Over
Prior Year’s 28% Price Waterhouse Company (2014.) Annual Price Waterhouse Financial
Wellness Survey Retried from: http://www.pwc.com/en_US/us/private-
company-services/publications/assets/pwc-employee-financial-wellness-
survey-2014-results.pdf 10/21/2014 14
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Audience Survey Question
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High Stress Impacts Workplace 1/3 EEes Cite Financial Issues A Distraction At Work
Price Waterhouse Company (2014.) Annual Price Waterhouse Financial
Wellness Survey Retried from: http://www.pwc.com/en_US/us/private-
company-services/publications/assets/pwc-employee-financial-wellness-
survey-2014-results.pdf
EQUALS 12-20 hours per month
LOST IN WORKPLACE
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Stress Heightens for Majority of Employees
In 2011 the highest financially
stressed employee segment
$100K+
In 2012: $30K - $49K
40% stressed in this segment
in 2012
28% in 2011
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Research says, “Every time someone on your
work team brings his/her money worries to the team,
WORKPLACE PRODUCTIVITY DROPS”
Cultural Impact
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Annual Cost to Employers For
Ignoring One Worker’s Financial Illiteracy©
Lost productivity for each financially unwell employee $450 (a)
Higher health care cost for poorer health $300
Subtotal $750
Lost employer FICA savings on worker who does not join
health care reimbursement (FICA)
$92 (cash)
(c)
Lost employer FICA savings on
dependent care reimbursement (FICA)
$382
(cash)
(d)
Worker stays in expensive health plan $800 (e)
Total Opportunity Cost $2000 +
“Employer cost for not providing basic financial
education that changes behaviors and job outcomes is
$750 to $2,000+ per employee!” © Personal Finance Employee Education Foundation. Garman, T. (2008) Increase the Bottom Line by Helping
Distressed Employees During Challenging Financial Times (PowerPoint Slides) Retrieved from:
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“Employers may not realize they can improve profits
–AND PROVE IT– by helping employees improve personal financial behaviors”
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Studies have shown that
RETURN ON INVESTMENT
for financial wellness training
in the workplace is
$2.8/1 AND MAY BE
MUCH GREATER*
* These calculations are reasonable estimates. Some numbers are very low estimates and ABC Company’s
Human Resources Department has the most accurate data. Decreases in accidents, workplace violence and
theft , and reduced fiduciary liability are additional ROI values that are not part of this ROI calculation,
although they could be and would increase the ROI significantly
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Integrate Wellness with
Retirement Plan
Use New Technologies to
Deliver and Measure Results
Develop Benchmarks For Future Success
The Tools To Use To
Change The Conversation…
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Participant Behavior
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56% Of Employees Prefer
On- Line Education
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Financial Literacy Topics
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Comprehensive Data Usage
Activity Reports
Company & Individual Level
Date
Personalized engagement
score
% of video watched
Viewed downloads &
attachments
Name & email address
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Audience Survey Question
Basics of Investing
Financial Planning Basics
Mechanics of Budgeting
Psychology of Budgeting
Basics of Asset Allocation
Basics of College Planning
Coordinating Your Dream Team
Protecting Your Family (insurance/estate planning)
Setting Goals
How To Maximize Your Social Security Benefits
Nearing Retirement: What to Do
The Most Common Retirement Mistakes
Why It Is Important to Create a Bucket List
Coping With Death
How Women Can Take Control of their Financial
Planning
Intergenerational Conversations: How to Have Them
The Importance of Financial Organization
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Employee’s Desire For
Enhanced Financial Information
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Conclusion
Financial Stress = Unhealthy, unproductive workforce
Latest Stats illustrate impact of and rise in stress
Illustrations demonstrate the benefits of a solid wellness program
Happier, more productive employees
Health savings costs
Better prepared for retirement
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Go to Financial Literacy Toolbox
www.financialliteracytoolbox.com
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Footnotes
a. Based on reduced absenteeism and less work time dealing with personal financial concerns. See
research and press releases at www.PersonalFinanceFoundation.org
b. Conservative estimate as poor financial wellness and high health care costs are correlated; confirming
research underway
c. Employer saves $92 in FICA taxes that need not be paid the government because employee contributes
$1,200 to health reimbursement plan ($1,200 X 0.0765)
d. Employer saves $382 in FICA taxes that need not be paid the government because employee contributes
$5,000 to dependent care reimbursement plan ($5,000 X 0.0765)
e. Employer saves $800 for every employee who moves from traditional BCBS health care plan (for which
employer pays $6,000) to consumer driven health care (CDHC) policy which is less expensive for the
employer ($5,200)
f. Bagwell & Kim, 2008; Drentea, 2000; Drentea & Lavrakas, 2000; Garman et al, 2004; Genco et al., 1999;
Garman et al., 2007;l Jacobson et al., 1996; Lyons & Yilmazer, 2005; Kim, Sorhaindo, & Garman, 2004;
Prawitz et al., 2007; Shatwell et al, 2007.
g. Kim, Sorhaindo, & Garman, 2003; Prawitz et al, 2007; O’Neill et al, 2005 (2 articles); Sorhaindo &
Garman, 2002.
h. Garman et al, 1999; Kim, Garman, & Sorhaindo, 2003 (AFCPE and ACCI); Kim, Sorhaindo, & Garman,
i. 2004; O’Neill et al, 2006; Weisman, 2002.
j. Kim, Garman, & Sorhaindo, 2003 (AFCPE and ACCI); O’Neill et al, 2006; O’Neill et al, 2005 (2 articles).
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