If you were hit with a financial emergency today, like an unexpected medical cost, a car repair, there’s a good chance you couldn’t cover it. In fact, according to a new Prudential report, more than 60 percent of Americans don’t have enough savings to cover a $500 emergency.
The so-called American Dream of achieving financial prosperity and security seems to be slipping out of reach for more and more Americans, and it’s taking a toll on everything from retirement to paying for college to productivity on the job.
“It comes as no surprise when we hear that less than a quarter of American workers describe themselves as feeling financially secure,” said Steve Pelletier, chief operating officer for Prudential’s U.S.-based businesses, at a financial wellness event on May 16 at The National Press Club in Washington, D.C. “Clearly, helping American workers with these financial challenges, achieving financial wellness, has never been more important.”
The event highlighted Prudential’s commitment to the financial well-being of American families—a commitment that includes the recently announced three-year, $5 million partnership with the Aspen Institute, the Washington, D.C.-based non-partisan education and policy studies organization. Prudential and the Aspen Institute co-hosted the event, and through the partnership hope to develop solutions that increase financial security for all American workers.
Pelletier, along with Lata Reddy, head of Corporate Social Responsibility and president of The Prudential Foundation; Andy Sullivan, president of Group Insurance; and Christine Marcks, president of Prudential Retirement were among Prudential executives who joined some of the industry’s leading influencers to talk about financial issues facing Americans.
“This notion of addressing the financial wellness needs of American workers is at the heart of who we are as a firm. We were founded more than 140 years ago to provide insurance to working families who, at the time, didn’t have access to that type of a product. So, it’s part of our ethos, our DNA,” said Reddy. “And whether it’s in the form of philanthropy or impact investments, working with our internal business colleagues or external partners, we are identifying solutions that work. It’s these partnerships that are critical, and our partnership with Aspen is intended to spark a national dialogue, to create a holistic conversation, rather than to address parts of the equation.”
The Power of the Wellness Effect, the recently issued research paper, cites growing acceptance among employers who agree that providing financial wellness programs as part of a benefits package supports important business goals. The programs naturally help to sustain employees, and benefit companies because employees are less stressed about money worries and less likely to need time away from work to cope with financial matters.
So why are many of us feeling so financially stressed? Debt levels are on the rise, particularly student loans that make it hard for young professionals entering the workforce. Health care costs also strain resources. Day-to-day living is getting more expensive and we are not saving enough for retirement, let alone unexpected daily expenses.
Many employees look to their employers for help. The company’s research found that individuals are more likely to use financial counseling services and tools aimed at budgeting, saving and investing if those services are offered by their employer.
Sullivan added, “We believe employers have both a responsibility and a really large opportunity to help solve the issues that we’re talking about today. The reason we’ve gone down this path is we feel that employers need to offer capabilities and solutions and day-to-day discipline around expense management and budgeting. The ‘how’ also matters greatly because at the end of the day, we’re talking about how do we get employees to act? How do we change behavior? So, we put a lot of focus around engagement.”
Additionally, employees tend to trust their employer, Sullivan said, so they may be more willing to use tools and services offered through benefits packages than if they had to find solutions on their own.
“The growing interest in Financial Wellness in the workplace is another positive step forward, and in many ways, it is the new frontier,” added Christine Marcks, president of Prudential Retirement. “That’s because we can now use data analytics to more closely project financial security over time, and use digital engagement to provide tailored resources or guidance when individuals need them the most.”
Prudential’s financial wellness initiative also includes expanded worksite financial wellness solutions such as diagnostic tools to help employers better understand the financial needs of their workforce. Employers who adopt these solutions will be able to offer employees a personalized interactive experience that includes videos, tools, webinars and articles to help them manage their financial challenges.
Read The Power of the Wellness Effect. Want to talk to someone at Prudential about its financial wellness initiatives? Contact firstname.lastname@example.org or email@example.com.