Retirement U is a five-hour interactive workshop designed for those in or nearing retirement.  Attendees review  thirty-nine critical financial decisions that shape the success or failure of one’s retirement.  Becoming prepared to make wise choices now guards against of running out of money later in retirement!

workshop outline (click link): Retirement U outline

Retirement Blueprint

Retirement Blueprint is a year-by-year written plan that mathematically guides employees to and through a successful retirement.

click to see a full sample plan: Prosperity Blueprint

A NEW APPROACH

If you take a closer look, is that the “80/20 rule” applies here.  Overwhelmingly, there is one very common theme when it comes to causes of employee stress and that theme is money.

The revelation that money is a wide-spread cause of employee stress may not be much of a revelation at all.  It makes intuitive sense, particularly in this economic environment.  You watch the evening news, you read the morning paper and you likely have a sense for the deteriorating financial health of the average American family.  You likely know that money worries are impacting your employees but probably don’t have a sense for just how broad and deep the issue is.

THE FINANCIAL STATE OF THE AMERICAN WORKER

The latest statistics tell us that a majority of Americans, your employees, are deeply concerned about their financial futures.  A September 2009 poll by CNN declared that money worries are the world’s greatest cause of stress, and it’s not even close.  A recent study by ComPsych reported that a staggering 92% of Americans are losing sleep over their finances.  If you scratch the surface to get an understanding of the average employee’s financial situation, it’s not difficult to see why financial stress has become so widespread.  Consider the following statistics:

• In a recent survey of over 45,000 American workers, 71 percent of respondents said they’d find it difficult to meet their financial obligations if their paycheck were delayed for just one week

• In early 2009, the Society for Human Resource Management reported that in the previous 12 months, survey respondents had seen a 26 percent increase in employees having their wages garnished by collection agencies; a 39 percent increase in requests for 401(k) plan loans; and a 20 percent increase in requests for pay advances

In an era where the average employee is living paycheck-to-paycheck with large debt obligations and little to no savings, you can expect that stress is taking its toll.  This is particularly true in an environment where employment is so uncertain.

ESTIMATING THE IMPACT ON THE BOTTOM LINE

A number of studies have emerged recently that help employers wrap their minds around how the issue of employee financial stress impacts organizational goals.  Not unlike other causes of stress, financial stress impacts employers by contributing to the already skyrocketing cost of health care while at the same time eating into corporate productivity.

Increases in health care costs

Financial stress is an epidemic and it’s translating into health-related costs for employers:

• As discussed, workers cite financial problems as their most frequent cause of stress and an incredible 75-90 percent of doctor visits are related to stress

• In addition to insomnia, those who report high levels of financial stress suffer from a range of stress-related illnesses including ulcers, migraines, back pain, anxiety, depression, and heart attacks

Productivity drains

If you were experiencing the types of financial issues described previously, would you be distracted in the workplace?  Would you spend time on the job or even miss work to deal with the situation?  Would you look for a higher paying job?  If you’re like many of your employees, you answered yes to at least one of these questions.

You can be reasonably certain that a majority of your employees are distracted on the job by their personal financial issues.  After all, if 92% of employees are losing sleep over money it’s probably naïve to assume that they are able to somehow avoid bringing those issues into the workplace.  However, not all financial issues are created equal and some employees will be better at focusing on their work responsibilities than others.

When it comes to breaking down the impact of financial stress on corporate productivity, there have been a couple of foundational studies.  A recent study by the Personal Financial Employee Education Foundation showed that approximately 1 in 4 employees are in serious financial distress.  On average, up to 80 percent of these individuals spend time at work dealing with their personal financial problems, wasting anywhere from 12-20 hours per month.   A study by Financial Literacy Partners estimates the cost of this lost productivity at $7,000/employee/year.

RECOMMENDATIONS FOR HR

As we’ve demonstrated, employers have much to gain by taking steps to eliminate the debilitating effects of financial stress on employees.  The following recommendations are meant to provide some short and longer-term solutions to dealing with this systemic problem:

Step 1: Start with a Survey

A good first step is to start with a survey.  An employee survey can help your organization personalize some of the statistics provided in this article.  Ultimately, the condition of stress is what impacts the health and productivity of employees and therefore stress is what you will want to measure.

Step 2:  Hold some seminars

You should think about introducing some seminars that help employees understand the basic tenants of financial responsibility.  As you can imagine, this job is likely not well suited to your 401(k) provider who is really in the business of selling investment products.  Generally speaking, it’s best to find a “fee only” provider who is instead in the business of educating employees as opposed to financial services.

Step 3:  Consider introducing a Financial Wellness coaching

After you’ve had time to understand how financial issues are impacting your specific organization, you may want to take a more strategic approach to the problem.  This may include adding a financial wellness component to your corporate wellness initiative.    These programs aim to break down the barriers to improved financial health by providing employees with all of the resources they need to solve their entire financial issue.  This includes live seminars and one-on-one financial coaching to accommodate varied financial issues, learning styles and levels of employee commitment.  Effective financial wellness programs have shown ROI of over 3 to 18.

SUMMARY

Personal financial issues are overwhelmingly the largest cause of employee stress.  This stress is impacting employers in the areas of health care costs and corporate productivity in significant ways.  Employers who are serious about addressing the issue of stress in the workplace would be well served to focus on employee financial health issues.  Adding a financial component to your corporate wellness initiative can produce an ROI of over 3 to 1.

 With uncertainty over the world economy, ongoing market volatility and record low interest rates, it’s no wonder that a majority of Americans are stressed about finances and worried about their retirement.   Financial Self Defense is an interactive workshop that help prepare adults and teens to survive and thrive in today’s changing economic environment.

 Financial Self Defense

Four, two-hour workshops covering over 100 practical ideas on how to strengthen your financial health, build net-worth and reduce stress in today’s challenging economy.   Enrollment includes employee, spouse/significant other and teens.

4 Day outline  (click link)

Financial Self Defense Plan

At workshops conclusion, each employee will receive a 16 page, customized-written blueprint covering debt freedom, retirement, budget, net worth, cash flow, college, taxes,  and housing

Prosperity Partnerships has worked with many business and churches, providing the education and written planning needed to help relieve the financial stress of their members.

And not too many see themselves sitting pretty in retirement. Only 20% are confident they will fully rebuild their financial losses, only 42% think they will be able to take care of basic living expenses, and only 20% think they will have enough money to pay for medical expenses.

This is according to Sun Life Financials “Unretirement” Index, with Sun Life this year dubbing 70 “the new 65.”

“The trend toward working longer into so-called retirement years has been increasing because of tough economic times,” says Bill Novelli, former CEO of AARP and now a professor at Georgetown University. But despite the willingness to work, with unemployment so high, older Americans as well as all age groups are facing stiff competition for jobs, he adds.

 In fact, many Americans are now planning to work to age 70 because of financial reasons. In the fall of 2008, before the crisis was felt throughout the nation, the most popular reason for working past traditional retirement age was “to stay mentally engaged.” Now, workers just as frequently say it’s “to earn enough money to live well.”

The survey also found that a minority of Americans are confident Social Security will be solvent by the time they retire, with only 14% very confident in Social Security, down from 22% in 2008, and only 16% are very confident in Medicare, down from 20%.

With these concerns in mind, investors are dramatically changing their spending habits.

Eighty-eight percent are spending less on entertainment, 84% are eating out less, 77% are cutting back on holiday shopping, 72% are putting off a large purchase such as a car or home improvement, 57% are canceling travel or vacation plans, and 29% have delayed a routine or elective medical procedure. Most alarmingly, 23% are not currently saving for retirement at all.

Employee Benefit News, 10/20/2010 by Lee Barn

The “phantom load,” as it’s sometimes called, is a result of many different household items (sometimes called “vampire devices.”) Some of the most problematic energy-drainers while “off”:

• Tivo
• Cable boxes or satellite dish boxes
• Sound systems
• VCRs and DVD players
• Computers
• Computer printers
• Cable modems/DSL
• TVs

There are also the smaller items; for example, did you know that your cell phone charger is using energy even when your phone isn’t attached? It’s only a couple of watts, but it’s a good idea to get into the habit of unplugging your charger from the wall when you unplug your phone from the charger. Kitchen appliances like microwaves, rice cookers, breadmakers, and coffee pots also typically use less than 5 watts– but there’s no reason to leave them plugged in when you don’t have to. The little things add up.

Provided by moneyandvalues.com

The most commonly used credit scoring system, called FICO, rates people from a very risky 300 to a pristine 850. And right now we’re in the middle of a credit score crunch: “You need a 750 or better today to have the same treatment you got with a 700 two years ago,” says John Ulzheimer, president of consumer education at Credit.com.

John D’Onofrio, CEO of Autoloandaily.com, seconds that: “Two years ago a 680 was enough to get a great car loan rate. Today it’s often the minimum to qualify at all.”

Think you’re still in the clear? Don’t be so sure. Lenders have been making changes that could cause your score to slip from excellent to average. Improve and protect your number with these strategies:

Learn Your Score

You have three FICO scores, based on your credit reports at the three credit bureaus: Experian, Equifax, and TransUnion. The numbers tend to be in the same ballpark, so pony up $16 to get one representative score at myfico.com. You can get an estimate free at Creditkarma.com. But the FICO score gives you a better sense of what lenders see.

Scout for Mistakes

Your scores are only as good as the information they’re based on. And a third of people who’ve pulled their reports have found errors, according to a Zogby poll. That’s good reason to read your report.

When you buy your FICO score, you’ll get a copy of the report it was based on. Get gratis histories from the other bureaus via annualcreditreport.com (you’re entitled to one free from each bureau every 12 months).

Spot an error? Request a correction, following the instructions on the bureau’s website. Let’s say the size of a credit line was misstated or an account was mistakenly marked delinquent. Getting the error fixed could raise your score as much as 200 points, says Ulzheimer, who has also worked for Equifax and FICO.

Never, Ever Be Late

As you’ll see in the pie chart on the right, the biggest chunk of your credit score comes from your payment history. Just one late payment can shave 100 points off a 750-plus credit score, says Ulzheimer. Lenders can’t tattle on you to the bureaus until you’re 30 days past due, adds credit expert Gerri Detweiler. But don’t risk it. For all your bills, enter recurring due-date reminders on your computer calendar.

Source: CardRatings.com

Missed a payment? Get back on track within the next 30 days, and you should “get back the lion’s share” of points lost, Ulzheimer says. More than 90 days late? The damage can stick for years. If it was a one-off lapse, call your issuer and plea for a good-will adjustment to your credit report. (It’s a long shot.)

Remember the Magic 20%

The second-biggest factor in your score is how much you owe vs. how much credit has been extended to you. The part of this that’s easiest to finesse is your credit card utilization rate, or your total card balances compared with your total credit limits, as well as each card’s balance relative to its limit.

Example: If you’ve charged $5,000 on cards and have $50,000 in credit, your rate is 10%. For the best score today, 10% is ideal, but you can probably creep up to 20% and keep a high rating.

Unfortunately, with banks lowering credit limits and canceling unused cards, it’s harder to maintain such a low percentage. In the previous example, if your available credit is cut to $20,000, your rate shoots to 25%. That could sink your score by as much as 50 points, says Ulzheimer. The lesson: Know your limits, watch for changes, and stay under 20% on each card and in total (0% if you’ll be applying for a loan soon).

Already above 20%? Paying down debt is the obvious way to lower your utilization rate, but another strategy is to apply for an additional credit card to increase your overall credit limit. That may cause you to lose a few points in the short term — so don’t do it if you’re about to apply for a mortgage — but it should pay off in the long run.

Keep Oldest Cards in Play

As noted, credit issuers these days are eagerly canceling cards that are not in use. Besides reducing your limit and increasing your utilization ratio, having an account closed can hurt you in another way, especially if it’s among your older ones.

See, 15% of your score rides on the length of your credit history. The longer you ably manage revolving debt, the better you look. So don’t cancel your oldest cards. And don’t let them get canceled on you: Move a recurring charge to each so they stay active.

Already ditched or been ditched? A new card (see previous) can help with your utilization rate, but there’s little you can do to help the “history” component of your score, except to keep other old accounts in use.

Accept Fate on the Rest

There are other factors involved in your score, but they’re not so easy to manipulate. For example, 10% is based on how well you manage a mix of credit types, such as mortgages, car loans, and credit cards. But you don’t want to go out and, say, finance a car just for a score boost; besides, you can easily get 750-plus with just a few well-tended credit cards. Along the same lines, 10% is based on “new credit,” but the effects of a new application can be positive or negative, depending on your history. In other words, if you want to be among the crème de la credit crème, accept what you can’t change, and focus on what you can.

Win at the Credit Scoring Game by Carla Friedl provided by CNN Money