| | DECEMBER 2024MANAGEHRMAGAZINE.COM9Today, the circumstances do not appear to have improved. Individual debt continues to climb. Many report that they live paycheck to paycheck with little money for saving. Private-sector pension plans are scarce. Assets under management in 401(k) plans are well over $4 trillion, which sounds impressive. However, the average account balance is insufficient, leading many to fear they will outlive their savings in retirement. And, if we must rely on auto-enrollment and auto-escalation features of 401(k) plans for the answer, it can be argued that defined contribution retirement savings plans would be a failed experiment.What is wrong with corporate well-being programs?401(k) plans are here to stay. We are witnessing the rise of corporate financial well-being programs. In survey after survey, employees say they want these programs from their employers. Employers know financial stress distracts us from work. It makes sense for employers to offer education for managing personal finances. But despite the popularity among plan sponsors, participation is disappointing, their effectiveness in influencing behavior is limited, and employees continue to feel financially stressed. So, what's this disconnect?One-size-fits-all financial education does not work. To start, the considerations seem endless; the concepts can be complex, and everyone's circumstances are different. It is almost impossible for a brief series of financial awareness classes to be the solution when, for example, the typical employee is now expected to determine how much to save, where to invest it, and make it last through retirement, given we are expected to live longer. Plus, knowing what we should do and actually doing it is not always a given, particularly when decisions that need to be made feel too big. Moreover, more is not always better. I have seen employers provide a financial well-being program through a dedicated partner, which competes with offerings from record-keepers, employee assistance programs, and so on. Not surprisingly, too many choices can sometimes cause people to fail to take any action.So, how can employers help their employees save more, pay off debts or raise their credit score? In my experience, the answer is access to live financial coaches. Workshops, punch lists, and online calculators are no substitute for the one-on-one interaction between a person and a coach. Coaches and counselors are used in many areas of our lives, so why not for some of our most important decisions? Different from traditional financial counseling, which is focused on providing expert advice and recommendations, coaches can collaborate with individuals to set financial goals, prepare action plans, and create accountability. Financial well-being programs that do not offer coaching are incomplete and will produce marginal results.Most of us are not adequately prepared to make major financial decisions affecting our lives and families. Corporate America is doing the right thing by stepping up to fill this gap. However, programs primarily focused on financial education alone will not get it done. To make a difference, employers need to identify ways to integrate personalized coaching as part of financial well-being. To make a difference, employers need to identify ways to integrate personalized coaching as part of financial well-being
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