What is Financial Wellness and How Fit Are You?Submitted by Alexander Consulting Group, LLC on March 4th, 2021
If you are in your 20s, 30s, or 40s, you may already have started saving for retirement, especially if you work at a company with a 401(k) or another retirement plan. But if you’re still trying to figure out how to get better at managing your money and start saving, then this might be a good time to learn what financial wellness is and see how fit you are.
What Is Financial Wellness?
“Financial wellness” is a term that embraces how to be better at money management across all stages of the lifecycle. Financial wellness programs – for individuals and for employees as a workplace benefit – go beyond the basic education of managing expenses. Financial wellness programs help ensure you’re financially prepared for life milestones, retirement, and even unexpected events.
Are Americans Financially Fit?
Even before the COVID-19 pandemic left nearly 100,000 businesses permanently closed and many people unemployed, American workers felt insecure about their finances. According to Fidelity Investments’ 2016 retirement score, more than half of working American households are at risk of not being able to cover essential expenses in retirement (food, housing, healthcare).
Those closest to retirement age are, not surprisingly, most prepared for retirement because that’s their focus. Retirement, though, often doesn’t look like the leisure time you may think. Many people 65 and older will be working more years and reducing their monthly spending to be able to meet expenses, particularly health expenses that go along with today’s longer life expectancy.
That should give younger generations motivation to lay the groundwork now for better financial security through all of life’s stages.
How to Take Your Financial Temperature
Here are key indicators of financial security. How many of these boxes can you check?
__Manageable Debt < 20% of yearly income
__Retirement Savings (at least one spouse has a workplace retirement plan or individual IRA)
__Emergency Fund savings of at least $3000
__Investments (stocks, bonds, IRA, 401(k) plan, etc.)
__Health Insurance (from any source)
How to Get Better at Finances
When you have something really important to accomplish, it’s usually better to get help than to try and figure it all out yourself.
One place to start getting better at finances is your workplace. Ask your Benefits Coordinator if there is a financial wellness program in place. If not, find out if that’s something the company would consider offering. At Alexander Consulting Group, for example, we take a three-pronged approach to employee financial wellness:
- We analyze each employee’s 401(k) compared to their goals, and optimize their portfolio based on how much they’re saving and their target retirement date.
- We provide guidance on setting up a comprehensive digital estate plan.
- We work one-on-one with employees to create a comprehensive financial plan for long-term healthcare costs.
We also consult with couples and individuals to help them reach their unique financial goals. Whether you’re saving for your first home or planning for retirement, we take clear and careful steps to evaluate your income and finances, investment needs and risk-tolerance, and short- and long-term goals. Together, we build a holistic, dynamic financial plan responsive to your life changes.
So, if you aren’t feeling as financially fit as you could be, give us a call or look for an advisor near you who can get you on the road to better financial health!
Alexander Consulting’s philosophy is to encourage people to plan for lifelong security: financial, health, and social. We take a highly individualized and zealously researched approach to financial planning so that our clients are fully prepared for all of life’s challenges.
Contact us: Office phone: 703.564.7595 Email: Jason@alexgroupllc.com