Retirement Consulting Insights
Financial Wellness: A Win‑Win for Employees and Employers
MAY 5, 2026
Do your employees struggle to manage day‑to‑day expenses, credit card balances or student loan payments? Are they saving for short‑term needs — like a car repair or medical bill — while still preparing for retirement?
In today’s environment of inflation, higher interest rates and record consumer debt, financial stress is a reality for many U.S. workers:1
57%
live paycheck
to paycheck
NEARLY
1/3
have less than one month
of emergency savings
ONLY
1 in 4
are on track
for retirement
Financial stress doesn’t stay at home; it shows up at work. According to the American Psychological Association, chronic financial stress can contribute to anxiety, depression, insomnia, and other physical health concerns — and employees spend several hours each week worrying about personal finances while on the job.2 For employers, this often results in lower productivity, increased absenteeism, higher healthcare costs, and delayed retirement.
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A Disconnect Employers Can’t Ignore While many leaders believe their organizations are providing meaningful financial support, employee sentiment tells a different story.
Many employees are struggling more than employers realize. And when employers underestimate financial stress, the consequences can directly impact an organization’s bottom line. The message for employers is clear: Financial wellness is no longer just an employee benefit — it’s a workforce risk management strategy. |
Employee Financial Well‑Being Matters to Your Business
Employees who struggle to meet short‑term financial needs are far less likely to make progress toward long‑term goals, such as retirement. And when retirement readiness stalls, organizations feel the impact.
Employers pay an average of $103,000 per year for each employee working past age 65,4 driven by:
|
Higher labor costs & |
|
Increased healthcare |
|
Lower productivity |
|
Retention challenges |
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The long-term financial impact to your organization can be significant |
Despite this reality, most employees do not proactively ask for help. Many are uncomfortable admitting financial stress — even as it affects their health, engagement and performance. That’s why traditional approaches such as standalone retirement calculators or isolated investment education sessions fall short.
Simply put, if employees can’t solve for short‑term financial challenges, they can’t focus on retirement. Financial wellness and retirement readiness are inseparable, and employers are uniquely positioned to bridge that gap.
What Employers Can Do
USI recommends an employer‑led, integrated approach that aligns retirement plan design, financial wellness and employee engagement to improve outcomes for both employees and the organization:
- Enhance retirement plan design with automatic enrollment, meaningful default deferral rates, and professionally managed default investments
- Offer a holistic benefits package that includes savings vehicles, such as an emergency savings account and HSA with employer matching contributions, to increase engagement and maximize tax advantages
- Provide personalized financial wellness resources, retirement planning tools, education and targeted support
- Ensure recordkeepers are proactively supporting participation, savings behavior and outcome measurement — not just plan administration
- Implement a financial wellness strategy with clear objectives, participation goals and measurable outcomes, adjusting over time based on data and employee behavior
Case Study: Plan Design Drives Positive Outcomes
A client partnered with USI to improve retirement plan participation and retirement readiness. Prior to engagement, automatic enrollment at 2% with 0.5% annual automatic escalation initially increased participation, but gradually declined back to 75%, with average deferrals at 5%.
USI recommended a strategic reenrollment for employees to revisit their elections, paired with higher default deferral and escalation rates. The results were immediate and sustainable:
- Participation increased to 95%
- Average deferral rates rose to 6.32%
- Only 12 participants opted out
Several years later, participation remains strong and deferral rates are now close to 9%, demonstrating how thoughtful plan design can improve savings behavior and long‑term retirement outcomes.6
Financial Well-Being Is a Win-Win
Supporting employee financial wellness creates a ripple effect across an organization. Research shows improvements in:
- Productivity and focus
- Employee engagement and job satisfaction
- Retention and desire to stay with the employer
- Mental and physical health outcomes
How USI Can Help
USI helps organizations design and deliver health, wealth and investment solutions that enhance benefit programs and strengthen workforce outcomes. To learn more, contact your local USI Consulting Group representative, visit our Contact Us page, or reach out to us directly at information@usicg.com.
1 Bank of America, Employee Financial Wellness in 2025
2 PNC Bank, 2025 Financial Wellness in the Workplace Report
3 BrightPlan, 2024 Wellness Barometer Survey
4 Principal® Cost of Retirement Analysis, September 2025 (Broken down by industry, the costs range from $75,000 to $126,000)
5 National Institute on Retirement Security, Retirement Insecurity 2024
6 Actual results will vary and are dependent upon various factors including, but not limited to: number of participants, total plan asset value, management fees, administrative costs and services provided. Neither USI nor its affiliates and/or employees/agents/representatives offer investment advice to plan participants.
This information is provided solely for educational purposes and is not to be construed as investment, legal or tax advice. Prior to acting on this information, we recommend that you seek independent advice specific to your situation from a qualified investment/legal/tax professional. | 1024.S0501.0034
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