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Employees Taking Proactive Approach to Financial Planning

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Employees appear to be taking responsibility for their retirement saving and financial situation over all. Employee behavior data from Financial Finesse suggests workers were more proactive about their financial situation in the first quarter of 2013. Financial wellness scores are also up, rising to 5.2 from 4.9 for the same period in 2012.

“There has been a major paradigm shift in how employees view their benefits and their employers’ roles in helping them achieve their financial goals,” Liz Davidson, CEO and founder of Financial Finesse, said in a statement. “We’re seeing that employees, on a mass scale, are proactively taking responsibility for their finances at levels not seen before.”

Data in the report is based on calls made to Financial Finesse’s hotline. Three-quarters of questions received were about planning and improving financial behavior, rather than reactions to a financial emergency.

While overall financial wellness has wavered since 2010, employees have been increasingly more proactive. In 2010, less than two-thirds of employees asked proactive questions about financial planning and wellness.

In being more proactive about their finances, workers are more involved with their retirement planning. Nearly half reported taking a risk tolerance assessment, up from 43% in the first quarter of 2012, and 40% have tried to determine whether they were on track by using a retirement calculator.

Whether they actually are on track though, is another matter. Just 19% of employees reported being on track to replace at least 80% of their preretirement income or to meet their retirement income goal. While low, that number is at least trending up: in 2012, 14% of respondents said they were on track, and 15% agreed in 2011.

Furthermore, just 25% of questions asked to the Financial Finesse hotline were about retirement planning, down five percentage points since 2012. “Since the most frequently asked question of our planners is “how much do I need to retire?” it would seem employees are becoming more self-reliant when it comes to planning for retirement,” the report noted.

“We’ve reached a tipping point with employees proactively taking responsibility for their finances, which is absolutely critical for our financial future as a nation, but that’s only the first step,” Greg Ward, director of the Financial Finesse Think Tank, said in a statement. “Until we reach critical mass in terms of employees saving sufficiently, there’s a lot more work to be done.”

Employees are becoming more disciplined investors, too. The report found 34% rebalanced their portfolio, up from 31% last year, and 39% said they were confident about their asset allocation.

Financial Finesse found that although employees are taking responsibility for their financial situation, employers are making their workers’ financial wellness a priority. The report refers to a study by AON Hewitt that found 80% of employers are prioritizing financial wellness for employees and 61% are helping them evaluate their retirement readiness.


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