Financial Wellness program helps health care company employees manage day-to-day
People frequently stop Michael Phyillaier on his daily walks through the halls of the central Pennsylvania health care system where he’s assigned as a Prudential retirement counselor.
“Thank you, Mike!” or “Mike, it’s working!” are common refrains during chance meetings.
If there’s one thing Phyillaier’s learned in his four years on-site, it’s that salaries vary widely in the health care industry, with some people making significant amounts of money and others barely making above a minimum wage. But the need for financial wellness crosses the salary spectrum.
“I quickly found out there’s a huge need for basic budgeting and financial tools,” said Phyillaier. “I run into folks every day who think they can’t save money to go out to eat or take a vacation because they have so much debt on top of their rent or a car payment.”
Phyillaier being on-site is part of the financial wellness program the health care company purchased from Prudential, and the personal stories of some employees are evidence of how having access to financial tools and resources in the workplace can make a real difference in people’s lives, according to new Prudential-sponsored research.
The study, “Planning for Retirement: Financial Wellness Programs Can Help,” points out that many employers are rolling out financial wellness programs to help employees improve their financial well-being and better prepare for retirement.
“Employers have two goals: one is to help employees with their overall financial well-being because it’s the right thing to do. And second, from a business perspective, financially well employees are more engaged and productive,” said the report’s author, Michael Knowling, head of client relations and business development at Prudential Retirement.
Knowling added that certain fields, such as health care, lend themselves well to financial wellness programs. Health care employees value student debt assistance and budgeting tools because the amount of required education means they tend to incur more student loan debt.
“It’s really not a surprise. One of the biggest hurdles is just helping people manage the day-to-day. It’s individuals and employers who are asking for it,” Knowling said.
For example, a 27-year-old specialty doctor at the health care company makes an excellent salary but came to Phyillaier loaded with stress about how she could even begin to pay back the $237,000 in student loan debt she owed.
One of the first in her family to get a medical degree, she switched majors, tacking on an extra two years of school and piling on the debt. Phyillaier walked her through the Vault student loan assistance tool available through the Prudential-offered financial wellness platform. She learned about a program that allowed her to significantly cut down her debt payments.
“They ask me, ‘Mike, have I screwed up the rest of my life?’ They’re stressed out about it to the point that it’s affecting their lives,” said Phyillaier. “It’s almost becoming the norm, and to me, that’s the saddest thing.”
Another employee in her 50s came to Phyillaier worried about being able to retire without debt. Although she has a master’s degree and a high-paying job, she had $59,000 of her own student loans on top of Parent Plus loans for her son’s college costs and a heavily mortgaged home.
“She’s very typical. She now sees retirement coming and realizes she should have done things differently. In her case, it was finding the most efficient way for her to get rid of her debt and still save money for retirement,” Phyillaier said.
Again, using the financial wellness program’s student loan assistance tool, she came up with a workable plan to decrease her repayment timeline by a decade and used the program’s budgeting tool to allocate an additional $120 a month to her loan payments without reducing her retirement plan contributions.
Her success is an example of how effective financial wellness tools available through the workplace, can make a real difference in helping individuals manage their daily expenses, said Knowling. “And if you can manage day-to-day finances—budgeting, managing debt, building an emergency fund—you’re more likely to have the resources to achieve the financial goals most important to you while protecting against unexpected financial demands,” he added.
One story is particularly poignant to Phyillaier, about a 37-year-old nurse making $70,000 a year who came to him when he started four years ago. A single mother with a 14-year-old son, she lived with her mother because the $79,000 she owed in student debt meant she couldn’t afford rent.
“I asked her, ‘If you had a little bit of extra money, what would you do with it?’ And she said she’d never been on a vacation and never been able to take her son on a vacation,” Phyillaier said.
So, over a year, he worked with her on a budget and a student debt repayment plan. This past January, she came to see him.
“She came in with a picture book. She had saved enough money to take her son on a Disney cruise and paid for it in cash. And she has just about enough that she’s going to be able to rent an apartment,” Phyillaier said. “Having a budget, being able to ask someone, ‘How do I do this?’ completely changed how she thought about money and changed her life.”