Perspectives : D.C. Retirement | May 26, 2022

Supporting employees' financial well-being

More than 70% of Americans say that finances are the number one cause of stress in their lives.1 For retirement plan participants, anxiety over their financial situation can jeopardize their plans for a successful retirement.

Consider an employee saddled with student loan debt who may be hesitant to contribute a meaningful portion of their salary to retirement. Or a household without an emergency savings fund tempted to put future goals at risk when faced with a financial shock. These scenarios can have serious long-term implications for participants. They can also have an impact on their day-to-day lives. In fact, 1 in 5 employees admit that personal finance worries have affected their productivity at work.2

Fortunately, plan sponsors recognize the problem, ranking financial wellness support as a top priority.  Highlighting the sharp rise in awareness and concern around the issue, 62% of employers say they feel "extremely" responsible for their employees' financial wellness, up from just 13% a decade ago.3

As an investor-owned firm,* Vanguard feels the weight of this responsibility too. Our investors—including retirement plan participants—are our owners. Our mission is to give them the best chance for retirement success, and our comprehensive approach to financial well-being is designed to do just that. We're bringing the best of Vanguard together, integrating personalized wellness experiences, trusted advice services, and enduring investments into a financial well-being ecosystem to help drive lifelong well-being.

*Investor owned means that fund shareholders own the funds, which in turn own Vanguard.

Welcome to Vanguard Well on Your WayTM

What is financial well-being?

Financial well-being means more than just money in the bank. To us, it means the ability to meet today's financial needs while continuing to build toward long-term retirement goals. It's also the feeling of optimism that employees experience when they understand their finances and are confident in their ability to pay bills, weather financial shocks, and live the lives they love today—without jeopardizing their long-term security.

With that as our goal, we're focused on delivering a program that meets the needs of participants, supporting them as they get their finances under control, protect against the unexpected, and make progress toward their goals.

Our targeted approach is tailored to participants' unique circumstances and focused on getting them to take the next best action each time they engage with us. Too much information or too many choices can potentially overwhelm and confuse participants. That's why we offer one recommendation, based on data and Vanguard research, to drive positive outcomes. In 2021, 60% of Vanguard participants took at least one action to improve their retirement readiness.4

Whether someone is just entering the workforce and struggling to save, a high earner with concerns around tax optimization, or a pre-retiree ready to create an income strategy, we can provide them with the education, support, and guidance they need on their path to a successful retirement. We call our approach:

Well on Your Way™

Comprehensive well-being support focused on the things that matter most:

  • Wellness tools that build confidence. Our omnichannel wellness experience provides tailored education and guidance using a personalized engagement methodology, offering support for critical needs including emergency funds, debt management, and retirement savings, as well as world-class third-party relationships and a new financial wellness hub.
  • Multifaceted advice services. We offer a range of advice options that provide built-in financial planning, ongoing portfolio management, and assistance with implementation, all with fair and transparent fees to help maximize savings.
  • Enduring, disciplined investments. Our low-cost, high-performance investments,** including our innovative target-date funds, help lay the foundation for financial well-being by allowing participants to get the strongest possible start on their journeys.

By focusing on what we do best, we can help employees manage their short-term financial goals while continuing to plan for a successful retirement. Because financial well-being isn't a perk—it's our commitment.

**For the 10-year period ending December 31, 2021, 223 of 300 Vanguard funds outperformed their peer-group averages. Results will vary for other time periods. Only funds with a minimum 10-year history were included in the comparison. Source: Lipper, a Thomson Reuters Company. Note that the competitive performance data shown represent past performance, which is not a guarantee of future results, and that all investments are subject to risks. For the most recent performance, visit vanguard.com/performance.

¹Capital One CreditWise Survey, 2021.
²PwC's Annual Employee Financial Wellness Survey, PwC US, 2019.
³Bank of America's 2020 Workplace Benefits Report.
⁴Vanguard, as of December 31, 2021.


Notes:

  • For more information about Vanguard funds, visit vanguard.com or call 800-523-1036 to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.
  • All investing is subject to risk, including the possible loss of the money you invest.
  • Advice services are provided by Vanguard Advisers, Inc., a registered investment advisor, or by Vanguard National Trust Company, a federally chartered, limited-purpose trust company.
  • Investments in target-date funds are subject to the risks of their underlying funds. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. An investment in target-date funds is not guaranteed at any time, including on or after the target date.