Products August 15, 2018

Responsive Design Enhances Financial Wellness Programs

To improve engagement with financial wellness programs, companies are employing new tools based in behavioral science and powered by responsive technology.

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The key to continued success of a financial wellness initiative is its ability to draw employees into the program and encourage them to take ongoing actions, according to the latest in MetLife’s “Financial Wellness: Creating a More Productive and Engaged Workforce” white paper series.

The third whitepaper, “Driving Engagement and Participation,” suggests today’s comprehensive financial wellness platforms have the capability to help guide employees’ decisions on some complicated matters.

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“Sophisticated data analytics and algorithms can determine whether employees are making transformative behavioral changes toward financial wellness or if they need a helping hand to stay on track,” the white paper states. “The most effective financial wellness programs are personalized and can reach users across various delivery channels.”

According to MetLife, most employees expect easy access to “self-service decision-support tools.”

“For instance, calculators and filtering tools can help employees approximate the amount of additional life insurance that might be needed upon the birth of a second child,” the paper notes. “Platforms may also include libraries of curated content that is continuously updated and pushed to employees based on their preferences and user history, as well as content management systems to promote breaking news and improve financial literacy.”

The research suggests employers consider linking communications with “acknowledge personal milestones or positive behaviors.”

“One example of a trigger communication might be an acknowledgement of a child’s fifth birthday, along with a reminder that it is not too early to begin a college savings fund,” MetLife suggests. “In addition to web-based platforms, regular human interaction through workshops, call centers or personal consultations are also important elements. Employees crave ‘high-touch’ one-on-one guidance to help navigate their finances.”

According to the analysis, a strong majority of employees are receptive to financial education in the workplace, with 84% describing financial wellness programs as offerings they want or need.

“Evergreen content about a company’s benefits can help employees make the connection between the company’s benefits offerings and their own personal financial wellness needs,” the white paper concludes. “Financial wellness providers should be able to provide a comprehensive library of content about student debt repayment, budgeting or life insurance. Topics can be as broad or narrow as required.”

Findings from the first white paper are accessible here; findings from the second are available here.

Client Service August 15, 2018

Health Care Unknowns Have Always Vexed Retirement Planners

A new “Cost of Long-Term Care” analysis published by Moll Law Group underscores the fundamental difficulty of planning for the health care unknowns faced by all retirement savers.

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Moll Law Group recently surveyed 2,000 people to ask how prepared they feel about meeting the costs of health care—and in particular long-term care arrangements—during retirement.

As the firm points out in a summary of the survey results, it is pretty much universally daunting for workers to think about how to best plan for future health care expenses. The effort requires factoring in many unknowns, such as unanticipated health setbacks or financial obstacles, as well as many knowns that only serve to ramp up concern, such as the ever-increasing cost of medical services.

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Citing data from the U.S. Department of Health and Human Services, the analysis suggests nearly 70% of Americans will need some type of long-term care. But, according to Moll Law Group, “most of the Americans surveyed are wildly unprepared for the out-of-pocket costs of long-term care.”

In the survey, the average expected long-term health care cost is given as just $25,350, whereas actual average costs are closer to $50,000. When factoring in the average costs of related services such as assisted living ($45,000), semi-private nursing home care ($85,775) or private nursing home care ($97,455), the picture is made even more concerning. Also informative, the average age Americans think they will need long-term care such as a nursing home or assisted living is 79, whereas the actual average age when Americans start taking advantage of these types of services is 73. 

According to the Moll Law Group survey, 64% of Americans have nothing saved for long-term care. At the same time, 67% say they are not able to contribute to parents’ long-term care due to their own financial constraints. This is despite the fact that the average length of time spent in long-term care for men is 2.2 years, and 3.7 years for women.

“Since most people do not have endless sources of money, especially after retiring from the work force, saving for long-term care must be factored in early to get the most return,” the analysis concludes. “While private nursing home care is probably most desired option, it is also the most expensive, costing on average $97,455. Semi-private facilities are slightly less at $85,775, while assisted living facilities are closer to $45,000. Having sound financial plans—and sticking to them—is the key to peace of mind later in life.”

As pointed out in the analysis, the truth is that “discussing long-term care is a hard and uncomfortable conversation, one that most people do not have.”

“In fact, only 33% of those surveyed have discussed options with their loved ones, and for 48%, the decision to move a loved one into long-term care was unexpected,” the firm reports. “By putting the forethought into what kind of future and quality of life you and your loved ones want, Americans can lessen the stress and feel more prepared for the curveballs life is known to thrown.”

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