Beyond the 401(k) With a Financial Wellness Program

A 401(k) is a strong start — but it’s not a comprehensive financial wellness program for your employees. To truly support them, employers must go beyond retirement plans and offer tools, education, and resources that meet employees where they are.

A more comprehensive approach may help reduce stress, boost engagement, and build a stronger workforce. Here are seven steps to help your employees move beyond the 401(k) with a financial wellness program.

1. Lay the foundation for retirement readiness

While a 401(k) is essential, ensuring your employees make the most of it is crucial. Employers can help employees aim to maximize their 401(k) contributions by monitoring participation rates and savings levels. Consider offering automatic enrollment and gradual contribution increases to ensure employees are on track for a secure retirement.

2. Build financial literacy with a financial wellness program

Financial literacy is key for employees to manage their finances effectively. Offering workshops or webinars can help employees who struggle with budgeting and managing debt. You empower employees to make informed decisions by providing them with the necessary tools, ultimately promoting better financial health.

3. Create a safety net

Emergencies can throw employees off course. And their retirement savings become their emergency savings fund. Providing these options may help employees prevent plan retirement withdrawals and give them the financial cushion they need during tough times.

4. Tackle student debt

Student loan debt is a significant barrier for younger employees looking to save for retirement. For many, there is a tension between balancing student loan payments with retirement contributions. For employers with a student loan repayment assistance program, employees can use a 401(k) match to help pay down debt while continuing to save for the future.

5. Seek financial coaching

Group education is helpful, but sometimes, individual guidance drives action. Financial coaching programs — virtual or in-person — allow employees to ask questions specific to their circumstances . Personalized support can be especially impactful during life transitions, such as buying a home, navigating debt, or planning for children.

6. Maximize tax-advantaged benefits

Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) are valuable tools for managing healthcare costs. However, many employees aren’t using them to their full potential. Many employees underutilize Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) despite their tax advantages. Regular benefits education — especially during open enrollment — may help employees understand how to use these accounts to reduce healthcare costs, increase tax efficiency, and free up funds for other financial goals.

7. Stay responsive to employee needs

An effective financial wellness program must evolve with employees’ changing needs. If the challenges of childcare, for example, a large corporation received feedback from employees about the financial challenges of childcare, it introduced new family-oriented benefits, such as better insurance options and additional childcare resources. Regular surveys and feedback sessions allow employers to understand employees’ evolving financial challenges and adjust their offerings accordingly. Employers can ensure their financial wellness programs remain valuable and effective by staying responsive to these changing needs.

Adopting a holistic approach to financial wellness empowers employees to take control of their financial lives while preparing for retirement. A workforce that feels confident about its financial future is more engaged and benefits the entire organization.

This content is for informational and educational purposes only and should not be construed as individualized advice or a recommendation for any specific product, strategy, or course of action. Brighton Jones, its affiliates, and employees do not provide personalized investment, financial, tax, or legal advice through this communication. This material is not intended to, and does not, create a fiduciary relationship under ERISA or any other applicable law. For individualized advice tailored to your specific circumstances, please consult with your adviser.