Employers are focused on retirement, but employees are stressed about day-to-day stressors of life, say experts
Real financial wellness has become a buzzword in workplaces, but what does it actually mean and can we actually achieve it?
While Brenda Hiscock believes the premise of financial wellness looks different for everyone, she underscores every plan shares the same foundation - contingency coverage for premature death or disability, and an emergency fund for unexpected job loss or expenses.
But once that foundation is in place, the definition branches out in wildly different directions.
"Financial wellness might mean financial independence and early retirement to some,” said Hiscock, certified financial planner at Objective Financial Partners. “For others, it might mean living within their means. Other people want to leave a big legacy. And then other people want to die with zero.”
Getting to the right plan means understanding not just a client's goals but also the barriers standing in the way and those barriers are not always financial, she said, adding that messaging absorbed in childhood can shape how people relate to money well into adulthood.
"I think there's a lot of psychology involved in financial planning that often gets overlooked," she added.
While she does acknowledge how “everyone can achieve financial wellness,” she’s also candid that the definition may need to bend depending on where someone stands. After all, adjusting expectations is far easier earlier in a career, when there is still time to reshape the plan. The problem she sees is that most people come to her a year before retirement, at which point the options are limited.
According to Hiscock, a good plan addresses tax efficiency, balances long- and short-term goals, and tells employees which savings vehicles to prioritize – because she often meets clients who should be contributing to an RRSP but are putting money into a TFSA or vice-versa.
“We really want to have a plan that's flexible, allows for changes and modifications as time goes on. Having that plan in place to me is sort of the starting point, because then you've got a path to follow,” she said. “We don't want to have our heads down and save everything and not enjoy life in the meantime, because we don't know when our day is going to come. So I think it's really important to look after today and make sure we're enjoying today but also having an eye on the future and making sure we're planning for that as well.”
Whereas Laura Bishop, senior consultant at IG Wealth Management, works with a lot of business owners and finds that conversations about employee benefits almost always drift toward retirement, like setting up a group RRSP or a similar long-term vehicle.
But she pushes back on that narrow focus, arguing that retirement is only one small piece of the puzzle. The real pressure employees face is much more immediate.
"The more urgent is the day-to-day stressors of life. So what I look at is, how can we have a measurable reduction in your employees' financial stress and improvement in their overall financial security across short, medium, and long term, particularly as retirement is often just a long-term goal, right? Where we're seeing people stress more about is the day-to-day,” said Bishop, pointing to rising grocery costs, gas prices and inflation are what keep workers up at night, not a retirement account they won't draw on for decades.
Hiscock also agrees with Bishop that the biggest financial stressors shift with the economy. Grocery prices dominate the conversation right now, while worries about interest rates and inflation have eased somewhat.
But beneath those headlines, the ongoing pressures break along generational lines, she said, noting that workers under 35 tend to stress about major purchases, job stability and figuring out how to start investing, while those in mid- to late-career are focused on paying down debt, managing expenses and building retirement savings.
One area where she thinks employers fall short is in communicating the value of matching programs.
"I think that it's really important to communicate to staff how important these matching programs are because they offer free money to people," said Hiscock.
Bishop also sees a pattern of employers treating financial education as a one-and-done event. Employees attend a retirement seminar, leave confused by the jargon, and never get a follow-up conversation that makes the information relevant to their own situation.
While Bishop argues that employers still place too much emphasis on retirement planning, she argues the bigger source of strain for employees is much more immediate like short-term cash flow, debt and the squeeze created by inflation. She points to mortgage renewals as one example, with many households facing sharp jumps in payments that far outpace wage growth.
She also suggests that employers rely too heavily on financial education that stops at the seminar stage. While lunch-and-learns may check a box, they often fail to translate technical information into something employees can actually apply to their own lives.
“I see a lot of people start to panic five to seven years from retirement because they've gone to these seminars, they’ve done their 3 per cent [contributions] but they don't actually know what that looks like in retirement,” she noted.
Additionally, Bishop points to the one-size-fits-all approach as part of the problem. Notably, employees face different financial pressure points at different stages of life, so support needs to be more tailored and addressed as such.
She also believes employers often under-communicate the programs they already offer, especially when it comes to benefits, leaving many workers unclear on what is available to them or how to use it.
Hiscock believes employers can play a meaningful role by building a financial planning allowance into their benefits package, noting how she's worked with clients who received an annual amount from their employer specifically for planning, and she said that kind of support makes it much easier for them to seek out a planner on their own.
As for the impact healthcare spending accounts and similar benefits can have on an employee’s well-being, Bishop underscores the value depends on how they’re used. While she acknowledged that the education piece is important, it only goes so far if employees do not understand the reasoning behind their financial decisions or see the payoff.
She also stressed that the mental health dimension of benefits deserves more attention alongside the financial side.
Where she sees the most untapped potential is in what she calls "moments that matter." Rather than delivering financial guidance on a set schedule, she believes employers should tie support to life events.
"If employers were able to home in on nudges around life events, like new babies, divorce and trigger and educate people in those aspects, I think that would also push the needle forward as far as having real financial wellness," she said.
“Financial wellness helps employees stabilize cash flow, manage debt, and build savings measured by lower stress, higher participation and better retention,” added Bishop.
