By Heather Lavallee
As a consumer, odds are you’ve seen an increase in your grocery bill over recent months, and it’s not necessarily because you’re adding more to your cart. Inflation is something we’re all witness to, and while the rising costs we’re facing are in part due to the limited supply of certain consumer goods, it’s also not entirely clear how long these rising prices will be sticking around. What is clear is that people are concerned about it.
According to new data from Voya, nearly three-quarters (73%) of Americans feel like their money does not go as far as it used to go. Add in the rising costs of goods and services to the reality that many individuals are juggling a number of competing financial priorities, saving for the future, and, ultimately, your retirement, is becoming increasingly challenging.
When it comes to financial security, knowing how to maximize every dollar from your paycheck might seem daunting. But here’s the good news: In many ways, your employer could help. Beyond health care or retirement savings plans, many people don’t know, or recognize, what benefits could be available to them through the workplace or that their employer may be able to help when it comes to competing financial needs. So as open enrollment season for employee benefits nears, it’s important to understand all the benefits your employer might be offering you — especially when it comes to tackling both your health and wealth needs.
Not so “voluntary” benefits?
Typically, when employees prepare for open enrollment, they spend most of their time focused on their core workplace benefits: medical, dental and vision. But voluntary benefits (otherwise known as supplemental health insurance) offered through your employer can provide you with additional protection, which might be something we can all benefit from in a post-COVID-19 world. What’s more, it’s encouraging to see that employees are increasingly turning to their employers for these types of solutions.
According to Voya research, the majority of working Americans (75%) want help navigating an unexpected life event, such as a critical illness or accident. So, what exactly are these benefits? Topping the list for some employers are voluntary benefits like accident, critical illness, and hospital indemnity insurance.
Because these types of voluntary benefits offered by employers are increasingly being sought out for filling coverage gaps, such as those with a high-deductible health care plan, they could be considered less and less as being “voluntary.” As such, don’t skip over reviewing them when selecting your workplace benefits.
For example, if you are expecting a baby in the coming year or perhaps are worried about getting sick from COVID-19 and being hospitalized for an extended period, hospital indemnity insurance can help, and it typically costs less than what most people expect.
In addition, voluntary benefits can be particularly useful for more than medical bills. Accident insurance, for example, can be used to pay for anything from living expenses — utility bills, pizza delivery or dog walking — to rides to your next doctor appointment. When you experience a qualified accident, that benefit payment is yours to spend how you like and need.
Tackling your student loans
According to the U.S. Department of Education, student loan borrowers in the U.S. owe a collective $1.6 trillion in federal and private student loan debt as of March 31, 2021. Now considered one of the highest consumer debt categories — next to mortgage debt, and higher than credit cards and auto loans — the financial burden of student loan debt is hard to ignore. And the impact student debt has on your paycheck could be putting a dent in retirement planning.
Today, many companies offer help, with some offering direct-payment support for student loan repayment. Within this model, employers make direct after-tax contributions to the servicers of their employees’ student loan debt. The employer is, in effect, making loan payments on behalf of the employee. This solution can help individuals pay down their debt more quickly — and, in turn, enable them to save more for short-term needs, like emergency savings. Consider asking your benefits administrator about the options available to you.
Saving for a rainy day
2020 taught us many things, but perhaps one of the most important was the value of emergency savings. With COVID-19 causing unprecedented economic disruption, as of August 2021, 61% of Americans said their emergency savings won’t last through the end of the year or that they have already run out of savings, according to the September installment of Clever’s COVID-19 Financial Impact Series.
Whether realizing the need for having such funds became apparent due to the financial toll taken on many, or simply seeing the pandemic as an “eye opener” for those who realized the need for emergency funds is not farfetched, rainy-day funds are becoming an increasingly popular need. The good news is that more than six in 10 individuals agree they are now better prepared for a future emergency (64%) and are saving more money to cover possible unexpected expenses (69%), according to data from Voya. So, it’s clear that more employers will look for more opportunities to help their workforce in this area. I would encourage you to consider talking to your employer about what opportunities they might offer.
When an unexpected cost hits, without proper protection or savings, many people will look to their hard-earned retirement nest egg for support. Many, if not all, of these voluntary benefits can help with immediate health and wealth needs. They can also benefit you in the long run as you won’t have your retirement savings plans put off track due to other, competing needs.
So, as you look during open enrollment—and all year-round—to harmonize your entire savings picture, take the time to think about how your employer can help with more than just health care insurance. Taking action today will only help you become more financially secure for tomorrow.
About the author: Heather Lavallee
Heather Lavallee is chief executive officer of Wealth Solutions for Voya Financial, Inc. In this role, she is responsible for driving Voya’s customer experience and profitable growth — delivering planning, investing and protection solutions to and through the workplace to help individuals and employers from “hire through retire.”
As part of the company’s focus on health and wealth solutions, Heather oversees all aspects of Voya’s Retirement business, including Tax-Exempt and Corporate Markets, which comprise the company’s workplace and individual retirement businesses, including 401(k), 403(b) and 457 plans. She also oversees Operations Services, which supports Voya’s Health and Wealth Solutions.
Data outlined in this release, unless noted otherwise, is based on the results of Voya Financial surveys conducted through Ipsos on the Ipsos eNation omnibus online platform among approx. 1,000 adults aged 18+ in the U.S. Research was conducted in multiple waves: March 25-26, 2020; April 22-23, 2020; May 29-June 1 2020; June 29-30, 2020; July 30-31, 2020; Sept. 24-25, 2020; Oct. 22-23, 2020; Nov. 19-20, 2020; Dec. 17-18, 2020; March 12-15, 2021; June 3-4, 2021 and Aug. 27-30, 2021. This material is provided for general and educational purposes only; it is not intended to provide legal, tax or investment advice. All investments are subject to risk. Please consult an independent legal, tax or financial advisor for specific advice about your individual situation. Products and services offered through the Voya® family of companies.