For most Americans, security begins with work. Earning a paycheck from a job is the cornerstone of our ability to take care of our basic needs such as food, clothing and shelter, and aspire to other goals.
In addition to a paycheck, the benefits many people receive through their workplace are another important source of security. In fact, 58 percent of middle-income workers overall say they feel more financially secure because of benefits at work, according to the MassMutual Workplace Benefits Study.1
However, not all workers agree, especially those with lower-incomes. While 65 percent of upper-middle-income Americans (those with annual household incomes of $75,000 to $150,000) point to employee benefits as a source of greater financial security, the study shows, only 42 percent of those with incomes of less than $45,000 say the same. Those who do not feel as financially secure are less likely to have access to benefits such as a 401(k) or other retirement savings plan, or life, disability, accident or dental insurance.
But workers who do have access to such benefits do not always make use of them. For instance, one in five study respondents reported declining vision, short- or long-term disability, accident or critical illness insurance.
Those who decline available benefits do so for a variety of reasons, including that they may not fully understand how certain benefits can protect their finances or may be unaware of the risks posed by disabilities, accidents or critical illnesses. It’s both a challenge and an opportunity for insurance brokers and employers.
A key to promoting greater financial wellness is a greater partnership between insurers, brokers and employers to help promote education about financial wellness.
Although only one in four employees are offered financial education at work, MassMutual’s study finds, as many as half would welcome additional help or guidance on personal finances from their employer. Moreover, 51 percent expressed a desire for their employer to provide more education about saving for retirement.
Millennials – those ages 21-37 -- are dramatically more open and interested in receiving help at the workplace. Seven in 10 Millennials would welcome financial planning services and six in 10 would be interested in budgeting assistance at work, according to the study.
The burgeoning interest in financial education at the workplace is a big reason why MassMutual is ramping up its educational capabilities as more employers focus on the financial wellness of their employees. MassMutual is stepping up its efforts to help educate workers about how insurance benefits may help solve individual financial problems and protect household finances. We’re systematically training dozens of retirement education specialists around the country to educate workers about how insurance benefits may complement their retirement savings and may be used to meet individual financial security needs.
While workplace benefits may help employees feel more financially secure, each employee’s personal financial situation is unique. Not every employee needs every benefit. Nor can many employers afford to pay or subsidize the cost of expanding their benefits offerings.
That’s why voluntary benefits are gaining momentum in the workplace market as employers increasingly focus on employees’ financial wellness. While many employers continue to subsidize benefits such as medical, dental, life and even disability, additional benefits are being made available on a voluntary or employee-paid basis only. Doing so allows employers to make available a wider array of choices with the goal of meeting the needs of different employee demographics. Meanwhile, employees can start a foundation using employer-subsidized protection benefits and then choose from a menu of additional choices to add coverages that make sense for their individual needs and budget.
Offering the right tools also helps. MassMutual, for instance, offers MapMyBenefitsSM, a holistic employee benefits guidance tool designed to help workers become more informed about their financial needs based on their individual circumstances. MapMyBenefits provides guidance to help employees prioritize their health care, protection and retirement benefits, and generally make the most of each benefit dollar based on their life stages, financial goals and financial situations. The tool is designed to help employees prioritize their benefit choices based on their needs as well as their budget.
But it starts with education about not only retirement planning but overall financial wellness and how other voluntary protection benefits can help enhance workers’ financial security. It’s the start of truly making the workplace a source of financial security for more workers.
Jon Shuman is leader of Workplace Distribution for Massachusetts Mutual Life Insurance Co. (MassMutual).
1 MassMutual, "MassMutual Workplace Benefits Study," February 2018. The internet-based research was conducted on behalf of MassMutual by Greenwald & Associates and polled 1,010 working Americans ages 25-65 who had annual household incomes of between $35,000 and $150,000 and participated in making household financial decisions.