Bridging the gap between financial wellbeing and retirement planning

There is no denying that working adults face numerous stressors, not only related to their work lives and professional aspirations but also at home, in their relationships and as members of their communities. While avoiding challenges and conflict is impossible, understanding how they affect overall wellbeing is important for learning skills to cope with difficulties in healthy ways.

Considering that 76 percent of working Canadians have a moderate-to-high risk of declining mental health, looking to the root causes and taking action to ease the pressures where possible is essential. According to research from our Mental Health Index last fall, 86 percent of people facing mental health challenges feel their conditions can be treated. This is good news for employers, as our findings also show that when anxiety and isolation rise, work productivity takes a dip.

For many Canadians, economic issues and financial strain directly correlate to their mental wellness. Across the board, two in five adults are overwhelmed by debt, and three in five have not received financial advice, according to our research. 

“There is an overwhelming sense of debt and looming economic uncertainties that could affect Canadians’ financial futures”, says Philip Mullen, TELUS Health's Vice President for Retirement Consulting.

There is a link between financial health and mental wellness, but gaps still exist among Canadian employees around retirement planning and their overall financial and mental health. There is a strong link between all of these facets of overall health, and understanding the links between them is key to best meeting your workforce’s needs.

Mullen emphasizes TELUS Health's ability to provide financial reliability and security as key factors in addressing Canadians’ wellbeing needs and the impact that current levels of financial strain are making. 

What is financial wellbeing?

Financial wellbeing encompasses personal budgeting, effective debt management, continuous financial literacy and education. However, its significance transcends balance sheets and bank statements. For employees, financial wellbeing isn't necessarily a standalone goal in their lives, nor is it a term commonly considered by the average individual.

Financial stressors often weigh heavily on a person’s overall health and productivity. The presence or absence of emergency savings, debt and the right education on planning for the future can significantly affect a person’s overall wellbeing. Consequently, individuals are increasingly seeking employers who recognize the interplay between their financial wellbeing and health.

There is a significant correlation between financial wellbeing and retirement planning. If employees understand what health benefits and retirement plans are best suited for their or their families' needs, their money will go further. At the same time, organizations will be able to ensure they are spending money on benefits programs that their employees actually use, ultimately resulting in a happy and productive workforce.

Challenges in traditional retirement planning

Retirement readiness, intertwined with financial wellbeing, has become a focal point for many organizations in Canada. Retirement and investment planning now hold a pivotal role in shaping both the financial health of a company and the personal wellbeing of its employees. Traditional retirement planning has long been the go-to approach for securing a worker’s financial future, but it’s not without its gaps and shortcomings. 

Often, a more traditional route approaches financial wellbeing as something separate, causing a fractured, rather than holistic, perspective on retirement readiness. It's centered around the notion of wealth accumulation instead of individual empowerment and health. A traditional mindset leaves employees to figure out on their own when to start saving for retirement, how much to save and to keep putting money aside regularly.

This traditional approach often overlooks the fact that financial wellbeing, mental health and retirement planning are intrinsically intertwined. It leaves out a sense of security regarding what to do in the event of significant financial hardship, let alone how to stick to your financial planning schedule if anxiety, depression or other mental health struggles begin to take a toll.

The power of financial data

By combining health and financial data, organizations can take a more employee-centric approach to retirement readiness. In our August 2023 Mental Health Index, financial risk scores declined most significantly among surveyed Canadian employees. Employees want information and education on financial literacy. 

How to prepare for their futures with not only a safety net but the security that retirement savings plans, like a pension, provide, is important. Many older people feel that younger individuals aren’t thinking about things like pensions, nor do they care about retirement planning when they enter the workforce. 

Our data shows this to be inaccurate: this younger generation of employees does care, but they may not understand the terminology or how to navigate the complexities of retirement readiness. This is why a retirement planning partner is crucial for today’s organizations.

When we explain to an organization’s workforce how pensions work, we find that those under 40 years old are more interested — and are more likely to leave an employer that does not offer guaranteed retirement income. This shows not only the importance of offering a pension, but also how crucial it is to prepare your employees for retirement and work to improve their financial wellbeing. We know that when employers help people feel more financially secure, employee retention and productivity improve. 

TELUS Health's approach

At TELUS Health, we understand that the future of retirement planning requires an integrated approach that connects people with the right tools to help them make informed financial decisions during critical moments in their lives.

See how TELUS Health can help your organization bridge the gap. Get in touch with us.