Empower Institute: Financial Health Means More Than Money

• It’s getting past roadblocks
• It’s connected to overall happiness
• It differs across racial and ethnic groups

Three-quarters of Americans surveyed say their financial health affects their physical and mental health, and more than half say it’s connected with overall happiness and quality of life.

They agree that financial well-being is a top priority, but they need help to achieve it. And when it comes to financial confidence and optimism, less than half of Hispanic Americans and Black Americans surveyed consider themselves financially healthy. That’s according to a survey¹ conducted by The Harris Poll on behalf of Empower Retirement and Personal Capital.

The findings, analysis and ways employers can help employees improve their financial well-being are published in two papers – “Financial Wellness is an Evolving Journey” and “Making Financial Wellness Attainable for Everyone” — available this month from Empower Institute, the research group for Empower.

“Now more than ever, it’s time for the financial industry and employers to let go of a one-size-fits-all financial savings plan for all Americans,” said Luis Fleites, director of thought leadership. “Yes, money is one factor in defining financial health. But diving into what is keeping employees up at night and understanding that financial well-being is interconnected with other factors can lead to real solutions.”

Survey results show that defining financial health is personal. Of those surveyed, 41% say it means surviving — paying the bills; 45% say it means stability — having savings or an emergency fund; and 29% say it means being worry free — having money for leisure and activities.

Further, financial health varies across racial and ethnic groups. For example, 38% of Hispanic Americans and 43% of Black Americans consider themselves financially healthy compared to 51% of white Americans. In addition, when asked about the amount of savings needed to feel financially healthy, Black Americans responded with $254,000, Hispanic Americans with $349,000 and white Americans with $589,000.

One thing consistent across racial and ethnic groups is that people crave advice. More than six in 10 people of color want help on their financial wellness journey.

Among top priorities:

• 36% want help paying off debt.
• 34% want help building an emergency fund.
• 31% want help planning for retirement.

“While the research reveals critical inequalities in terms of how different groups view their financial wellness, it also identifies a clear opportunity for employers to step in and create meaningful change,” Fleites said.

The research revealed three areas in which employers could help their employees move past roadblocks and improve their own financial health:

• Understanding the needs and challenges expressed by underrepresented groups
• Creating tailored engagement programs based upon underrepresented groups’ challenges
• Providing unbiased resources, such as automatic plan design features, digital tools and personalized online advice

Read more survey findings and analysis at Empower Institute.

About Empower Retirement

Headquartered in metro Denver, Empower Retirement administers approximately $1.1 trillion in assets for more than 12.8 million²retirement plan participants as of Sept. 30, 2021 is the nation’s second-largest retirement plan recordkeeper by total participants.³ Empower serves all segments of the employer-sponsored retirement plan market: government 457 plans; small, midsize and large corporate 401(k) clients; non-profit 403 (b) entities; private-label recordkeeping clients; and IRA customers. Personal Capital, a subsidiary of Empower Retirement, is an industry-leading hybrid wealth manager.

For more information please visit empower-retirement.com and connect with us on Facebook, Twitter, LinkedIn and Instagram.

1 The survey was conducted by The Harris Poll on behalf of Empower Retirement and Personal Capital from March 23 to April 5, 2021. We surveyed 2,005 people, all of whom were 18+ and living in the U.S. The online survey has a +/- 3% margin of error and a 95% confidence level.

2 As of Sept. 30, 2021. Information refers to the business of Great-West Life & Annuity Insurance Company and its subsidiaries, including Great-West Life & Annuity Insurance Company of New York and GWFS Equities, Inc. GWLA’s consolidated total assets under administration (AUA) were $1,131B. AUA is a non-GAAP measure and does not reflect the financial stability or strength of a company. GWLA’s statutory assets total $75.2B and liabilities total $73.3B. GWLANY statutory assets total $3.5B and liabilities total $3.3B.

3 Pension & Investments 2020 Defined Contribution Survey Ranking as of April 2021.

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