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What Financial Wellness Really Means for Your Clients

The concept of “financial wellness” is everywhere lately. So much so that when LIMRA hosts groups who work in the workplace retirement space, we frequently receive requests to include “financial wellness” as one of the top topics for discussion; yet, when we bring it up, someone invariably asks “What is it, really?”

Someone might falsely assume that financial wellness is limited to “retirement readiness,” but do we really understand what financial wellness means or what it’s about?

Part of the problem in trying to apply a definition to financial wellness is that the wellness we speak of is different for everyone. We can identify pieces of what financial wellness might be, but they will fit together differently for different individuals and their circumstances. Maybe a better approach to answering “What is financial wellness?” is to first ask what it isn’t.

It isn’t financial distress.

In October, LIMRA asked 1,051 Americans about their levels of financial stress rated on a 1-to-10 scale. Only 5 percent reported no financial distress at all, and another 5 percent reported the lowest level of stress at 1 out of 10. Almost a quarter (23 percent) reported high financial stress (8-10 on the scale), with another 50 percent reporting moderate stress (4-7). In 2015, the American Psychological Association reported that money was the most prevalent source of stress for Americans.

The word “stress” is much like the term “wellness.” It’s amorphous, shifting from individual to individual. But there are pieces of what would be considered low or no financial stress that can be widely agreed upon, such as being able to pay the bills, keep food on the table and keep the lights on. That’s setting a low standard, though, and does not aspire to more than meeting basic needs.

There is a structure to how people interact with money and build financial security — with wellness efforts such as financial products and offerings. This structure helps people move along a spectrum from survival to planning to a point where they can enjoy their assets and circumstances:


» Earn — receive an income.

» Live — meet basic needs.

» Save — set something aside for both short- or longer-term needs and goals.

» Protect — establish basic protections for a financial foundation and future (health/wealth/retirement).

» Enjoy — make use of, or enjoy, your efforts (in both the immediate and longer terms).


The workplace, as the foundation for financial security and income, is a logical place for offering financial wellness support. Offering education, engagement and tools that help employees counter financial stress and make progress in their interactions with finances is integral to helping them make the best use of benefits programs.

Increasingly, the financial services industry is connecting financial wellness support to benefits offerings. The industry is doing so because employers are realizing the importance of financial wellness as well as the implications of financially distressed and distracted workers.

What a wellness program looks and feels like is another question, with an amorphous answer. What it means for everyone to enjoy their assets, as a financial goal, will vary from person to person. For example, saving for retirement may be very different for a worker who can count on a defined benefit plan for at least some income than it would be for one who will be completely responsible for funding their own retirement. 

The following common principles can be a foundation for a wellness effort, whether executed in the workplace and/or facilitated by advisor interaction:


» Holistic and relevant — focusing on individuals’ whole financial lives, not just benefit by benefit, or focusing on retirement without considering other and much more immediate financial objectives. 


» Educate, then engage — building baseline knowledge, the traditional approach to benefits communication, isn’t enough. Establish context for products and other solutions.


» Flexible — delivering via individuals’ methods of choice, on their terms and in their own time.


Perhaps a baseline answer to “What is financial wellness?” — freeing folks from financial distress and enabling them to move beyond simply “living” to “saving, protecting and enjoying” — is a fine place to begin understanding it and how employers, providers, advisors and benefits programs can help us achieve it.


Deb Dupont is the associate managing director of institutional retirement research for LIMRA Secure Retirement Institute, and manages research related to workplace retirement plans and planning. Deb may be contacted at [email protected] .

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