National Retirement Security Month
October 2020

NAGDCA Tip #3:
Financial Wellness is Cornerstone of Retirement Preparedness

Lexington, KY, October 13, 2020—Employers are increasingly focusing on providing their employees with financial wellness benefits, with a key focus on retirement preparedness. National Retirement Security Month, originally conceived as National Retirement Security Week by NAGDCA in 2006, asks employers to make every effort to help Americans take the steps necessary to adequately prepare for their financial security in retirement. NAGDCA is the premier professional association for plan administrators and services providers of government-sponsored defined contribution retirement plans.

Results from EBRI’s 2020 Employer Financial Well-Being Survey attest to employers’ focus on financial wellness programs and, specifically, in addressing employee retirement preparedness. Of the 250 respondents representing companies with 500-10,000+ employees:

  • 25% are highly concerned about their employees’ financial wellbeing
  • 31% have a strategy for improving financial wellness
  • 52% currently offer financial wellness initiatives
  • 40% identify retirement preparedness (in a tie with healthcare costs) as the leading issue to address
  • 26% identify retirement planning as the leading area of focus; 45% of companies with 10,000+ employees vs. 23% for companies with 500-9,999 employees

“We’re heartened to see that employers, increasingly, are turning their attention to supporting their employees’ financial wellness; it’s difficult to imagine how one might attain financial security in retirement without financial stability during active working years,” stated NAGDCA Executive Director Matt Petersen. “A mainstay of NAGDCA’s commitment to raising awareness of the need for Americans to save for retirement, is our focus on providing plan sponsors with the tools they need to support this effort.”

NAGDCA shares the following financial wellness best practices culled from members’ winning programs:

  • Incentive-Based – Rewarding employees for participation at every step drives engagement and participation.
  • Tailored – Having a clear view of individual employees’ current financial picture requires a deep dive into the many aspects key to ensuring financial wellness. Categories to be covered to determine areas needing attention are:
    • Safeguards – All facets of having financial affairs in ‘good order’ (e.g., insurance, estate planning, will, advance directive).
    • Emergency Readiness – Having adequate emergency savings to prevent the need to accumulate debt, draw against retirement savings.
    • Budgeting – Aligning spending with earnings; differentiating needs versus nice to haves.
    • Retirement Preparedness – Costs (e.g., healthcare); income options; role of compound interest in saving; how all available benefits (i.e., income options including Social Security, pension and defined contribution retirement plans, personal savings) work together; when best to take Social Security.
    • Debt Management – What type (e.g., credit card, student loan, mortgage); amount owed, at what interest rate; how best address (e.g., consolidation; priority).
    • Objectives – Beyond ensuring a financially secure retirement, what are the employee’s goals (e.g., primary and/or secondary home, college education).
  • Personal and Personalized – Including one-on-one consultations and a game plan targeted to individual needs based on scored assessment responses.
  • Educational – Providing a variety of seminars that address needs at various life chapters and levels of financial literacy.
  • Measured – Assessing progress with periodic one-on-one consultations to identify areas requiring continued attention.

NAGDCA notes that to whatever extent possible, employers should include retirement saving best practices in their plan design. As widely recognized, these include—for sponsors able to use them, as not all public sector sponsors are—auto enrollment, escalation, and default investment features.

“Financial wellness programs provide employees with the means of understanding what is for many a ‘scary’ topic provoking an approach-avoidance response. Lack of a clear picture of all financial wellness entails—where they are, where they want to be, and how to get there—is detrimental to both short-term function—mental health, productivity—and long-term financial security. As such, financial wellness is, clearly, a key determinant of an employee’s ability to achieve sustainable financial stability,” concluded Matt.

Additional NAGDCA-provided resources on financial wellness include:

Seeking the Holy Grail – Holistic Financial Wellness
Wednesday, October 14 and 28 – 2:00-3:00pm ET
This presentation is one of six Learning Labs offered during Connect, NAGDCA’s new virtual engagement and learning series launching in October during National Retirement Security Month. To register for and learn more about Connect, click here.

NAGDCA provides education, information, and training in all aspects of public plan administration to support members in creating plans that enable secure retirement outcomes for their participants. NAGDCA conceived National Retirement Security Week in 2006 to spur a grassroots movement to increase awareness of the need to save adequately for retirement; the effort was extended to National Retirement Security Month in 2020. Senate resolution for the focused awareness-raising effort continues with bipartisan support annually. To learn more about NAGDCA, visit

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Robin Schoen
Robin Schoen Public Relations