New Financial Finesse Study Uncovers Emerging Solution to America’s Retirement Crisis

’s latest study identified an opportunity for U.S. employers,
who are uniquely suited to address the American retirement crisis, to
redefine how they measure the success of their retirement plans.

With the majority of employees facing delayed retirement or worse, not
being able to retire at all, Financial Finesse has developed a 6-step
retirement preparedness model
which it urges employers to adopt in
order to address the crisis that could significantly impact their
workforce. This model changes the paradigm from participation in
company-sponsored retirement plans to preparation for all aspects of

Many employers have adopted automatic features, such as automatic
enrollment and contribution rate escalators. This has boosted retirement
plan participation, but employees still aren’t saving enough. Even with
88 percent of employees participating in their employers’ 401(k) plans,
they are overall, still massively underprepared for retirement, with
only 19 percent of employees surveyed on track to reach their retirement
goals. The percentage of underprepared employees drops even lower for
certain demographics—with African Americans, Latinos and women at
highest risk for not achieving a comfortable retirement.

Among those employees who reported not being on track for retirement, a
deeper analysis shows a lack of proactive retirement planning.
Seventy-six percent of those that are not on track have not used a
retirement calculator to run a projection—a first step in knowing how
much they need to save. Additionally, only 47 percent have taken an
investment risk tolerance assessment and only 31 percent rebalance their
investment portfolio.

Greg Ward, the firm’s Think Tank Director, explains employees who are
not prepared for retirement fall into three main groups:

The unknowns – employees who are completely unprepared and
overwhelmed. These employees don’t know if they are saving enough to
retire comfortably and don’t have the resources, or don’t know where to

The underfunded – employees who have taken some initial steps to
plan for retirement, such as running a retirement projection; they
realize they are not saving enough for retirement but can’t or aren’t
likely to due to other competing priorities.

The underconfident – late career employees who from a financial
standpoint, could retire comfortably but are uncertain about economic
and market instability and need to be coached through the transition
into retirement.

Financial Finesse’s Retirement Preparedness Model is designed to address
the needs of all three groups, using principles of behavioral finance
that have been proven to dramatically improve savings rates as well as
investment behavior. The model starts with prompting every single
employee to run a retirement estimate so that they see where they stand,
and then sets employees up for success through automatically enrolling
them into the plan at a high savings rate, and escalating that rate
annually in small increments. Lastly, it provides benefits education and
financial wellness programs to employees, which alone have been shown to
increase retirement preparedness by 77 percent.

According to Ward, “This model is the future. For years, all of us in
the retirement industry have come at the problem from different angles
thinking that there’s some sort of magic bullet that would change
everything for participants.” He adds, “The reality is that a holistic
approach is far more successful. Tools alone can’t resolve the problem;
employees have to fundamentally change their behavior and that requires
a very strong support system.”

Financial Finesse CEO Liz Davidson believes the model has tremendous
economic implications. “Imagine if retirement preparedness were the
norm, not the exception, and what if you didn’t have to juggle
financially supporting your elderly parents with sending your children
to college? What if you could rest easy knowing that no matter what
happened to the economy, you would be okay; able to retire free from
financial worries?” she asks. Davidson continues, “What if we all worked
for the fulfillment rather than the paycheck—as independent agents
financially secure enough to make choices rather than accept
circumstances? The implications of actually solving this problem, or at
least putting a major dent in it, are tremendous.”

For an infographic on Financial Finesse’s recommended Retirement
Preparedness Model, go to

About Financial Finesse

Financial Finesse provides unbiased financial guidance and education to
employees through their employers, delivered as comprehensive financial
wellness programs. Its education is proven to move the needle in
employees’ financial security and provide a clear return on investment
for their employers in productivity, absenteeism, health care costs and
more. All programs are customized and holistic, delivered by CERTIFIED
FINANCIAL PLANNERS™ who do not sell any financial products nor manage
assets. Its multi-channel education approach offers a variety of
channels such as live workshops, webinars, one-on-one financial
counseling sessions and a financial helpline—reaching over 2.4 million
employees at over 600 companies.


Financial Finesse
Danielle Encinas, 424-218-7954