Finding the path to financial wellness

Una Morabito

By Una Morabito
Una Morabito is Head of Client Management for the Workplace Solutions unit of MassMutual.
Posted on Aug 5, 2020

The monumental toll the Coronavirus has taken on the health and wellness of American businesses and its workers is well documented. The pandemic has left many businesses and their employees struggling financially as states reopen in fits and starts.

If your company is reopening or has already reopened and is trying to regain its momentum, you may notice that the battle with the Coronavirus extends beyond just questions of health. After being unemployed for weeks and even months, many people have been left with piles of unpaid bills and a rising mountain of debt. Those who contracted the virus — even if they have medical coverage — may now face thousands of dollars in medical expenses. Longer-term financial goals such as saving for college or retirement may have been shifted from their to-do list to their wish list.

Employers can help employees begin rebuilding. MassMutual offers tools and resources that can help employees get back on track financially. While many of these capabilities were built during good economic times, they have never been more valuable or relevant than the current pandemic-fueled economic downturn.

A great starting point is to encourage employees to kick start MapMyFinances, MassMutual’s financial wellness tool. MapMyFinances can help employees reassess their current financial situation and then make prescriptive recommendations to begin rebuilding what may have been lost. And the tool is available at no additional cost through employers that sponsor a MassMutual retirement plan, voluntary benefits, or both.

What should employees be considering at this point? That depends upon each individual’s personal situation, which is where MapMyFinances can be particularly helpful. The tool relies upon data from each person’s individual finances, goals and budget to sort out priorities and create a plan of attack. Having said that, there are a few overriding considerations:

Budgeting – Personal financial evaluations typically begin with budgeting, comparing workers’ income and spending. Many people now face overdue bills for a mortgage or rent, credit card or other debt, and may need to readjust their spending accordingly. MapMyFinances can help users examine their spending habits, identify fixed vs. variable expenses, sort financial needs from financial wants, and make sound financial choices. If a person’s savings has taken a hit due to the pandemic, for instance, MapMyFinances’ budgeting tool may be able to help them revamp their monthly budget and even find cash to rebuild their nest egg for future emergencies, medical costs or retirement.

Emergency savings – It’s been said that a recession is what happens when your neighbor is out of work; a depression is what happens when you lose your job. With unemployment at levels not seen since the Great Depression, many people have tapped and even drained their emergency funds. Once someone returns to work, it’s time to tackle whatever outstanding financial obligations may have been created by the pandemic. It’s also a good time for workers to re-evaluate their financial ability to weather an emergency. Employees can begin to slowly rebuild their financial capacity to weather an emergency with help from MassMutual, which makes emergency savings accounts available to all employers that sponsor one of our retirement plans. Some or all of a retirement plan participants’ contributions can be earmarked for emergency savings until he or she rebuilds a financial cushion.

Health Savings Accounts (HSA) – Anyone who has suffered severe health consequences from either the Coronavirus or another critical health condition knows that medical bills can be staggering. Workers covered by high-deductible healthcare plans can accumulate savings within a HSA to cover medical expenses both today and into the future, including during retirement. Savings in a HSA can help bridge high healthcare coverage deductible amounts and protect personal finances. MapMyFinances can help employees determine their financial exposure, calculate how much they can afford to put away in a HSA, and over time rebuild their ability to more easily manage less-serious medical problems while withstanding financial shocks from more serious medical issues.

Debt management – One of the side effects from the Coronavirus, whether an employee has contracted the disease or simply suffered from its wide-ranging financial consequences, is increased debts. MapMyFinances can help workers assess their debt situation and then provide a plan to begin whittling down what they owe. The low-interest-rate environment created by the Federal Reserve in reaction to the pandemic has some upsides for those who are digging through a pile of debt. There may be opportunities to refinance mortgages, student loans or even credit card debt at lower rates, reducing monthly outlays. Eventually, workers may find some additional dollars for other needs, including retirement savings, emergency savings, HSAs and other goals.

Retirement planning sessions – Financial pros, with help from providers, can do a world of good for participants by helping them understand the basics of retirement planning, including how to navigate market volatility. Sponsoring educational sessions about long-term investing, the recovery of markets over time, and the importance of keeping long-term financial goals in mind when making investment decisions can help reassure nervous retirement savers. MassMutual offers webinars or other online tools to conduct educational seminars.

The Coronavirus has created one of the most stressful financial climates in history, a situation that lingers as America haltingly reopens for business. Hopefully, your company and its employees are well on the way towards greater financial wellbeing. Meanwhile, reach out to MassMutual and tap our resources to help your employees regain their financial footing. We’re all in this together.

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Guidance may not be available for certain products. Guidance is based on MapMyFinances assumptions and information provided by the employee and employer.