Perspectives : DC Retirement | January 09, 2023

The path to financial wellness starts here

Updated: December 22, 2023

First in a series

Are your participants worried about:

  • Making ends meet?
  • Unexpected expenses?
  • Not saving enough for retirement?
  • Deciding when to claim Social Security?

All while watching other financial obligations pile up? If so, we can help you help them.

Welcome to Vanguard's Guide to Financial Wellness.

If you didn’t already know, or perhaps didn’t have it marked on your calendar, January is Financial Wellness Month. This is a time when you can not only assess your personal financial well-being, but also set yourself up for success in the new year—which can be especially important given our current environment of rising inflation and market volatility.

After all, it’s no secret that money can be a source of anxiety for many people. A 2022 survey from the American Psychological Association reports that money is a significant source of stress for 65% of Americans—a figure that grows to 82% for people under age 43.

Percentage of Americans for whom money is a source of stress

Source: American Psychological Association, 2022. Stress in America: Money, Inflation, War Pile on to Nation Stuck in COVID-19 Survival Mode.


But personal finances don’t have to be a grim spot in an otherwise bright life, regardless of one’s financial status. As Vanguard’s Guide to Financial Wellness makes plain, following a few easy guidelines can help put your participants on the path toward paying their bills, lowering their debt, and coping with an unexpected financial emergency—all while maintaining a firm grip on their retirement preparation.

The guide defines financial wellness as:

The objective financial situation of a person, household, or family. It is the ability to meet current and near-term financial obligations and to be on track to meet your future goals.

Of course, no one achieves financial wellness and is suddenly set for life as a result. Financial wellness is an ongoing effort that must be nurtured and maintained over one’s lifetime. To do so, our guide suggests small steps your participants can take in three key areas: taking control of finances, preparing for the unexpected, and making progress toward their goals. And to support your pre-retiree and retiree participants, we’ve expanded the Financial Wellness Hub within our Participant Experience with a new section, Live Well in Retirement.

Take control of finances

Taking control of one’s finances is the first step toward realizing financial wellness. This is the step in which your participants determine where their money’s coming from and where it’s going. In other words, create a budget. We realize not everyone likes to do this, but a budget is a powerful tool to help get finances in order. There’s no one-size-fits-all solution to budgeting, so the guide encourages participants to design one that works for them. And it offers four different approaches to help them get started.

From here, they can focus on effective debt payment strategies, spending strategies, and growing their retirement savings. The guide will help with clear action steps.

Read "Tools to Help Your Participants Shrink High-Interest Debt."

Prepare for the unexpected

The next step toward financial wellness deals with uncertainty—because life happens. Cars break down. Pipes burst in winter. People get hurt.

This section of the guide details how your participants can mitigate financial risk in their lives. One key suggestion is to build an emergency fund to stave off that sudden plumbing crisis or other spending shock. Another is to set aside savings in case of a loss of income.

The guide also helps your participants navigate the world of insurance (and it’s a big world) for more catastrophic financial setbacks. It further delves into how to be legally prepared for setbacks with appropriate documentation, such as a will, power of attorney, or beneficiary designation.

While uncertainty can be overwhelming, the guide lays out actions that your participants can take now to help them be more prepared.

Read "Are Your Participants Expecting the Unexpected?

More help for your participants

We’ve integrated our financial wellness philosophy into our participant experience with My Financial Wellness. When your participants log in, they can tell us about their financial goals and get simple, supportive, and personalized tools and information to help them on every step of their journey to improve their financial well-being.

Make progress toward goals

So, with current finances under control and the unexpected taken into account, the third step on the path to financial wellness is for participants to start thinking about their longer-term goals, like retirement, education, and health care.

It’s important to determine how and where they’ll save for these goals. For instance, tax-advantaged accounts, such as a defined contribution retirement plan and health savings account, could be good for long-term goals like retirement and future health care expenses (and current ones too). They allow participants to accumulate money now and save on tax bills.

For more flexibility and easier access to money when it’s needed, taxable accounts can be suitable for shorter-term goals like vacations or a down payment on a car or house.

This section of the guide also offers tips on prioritizing debt, provides scenarios on when it may be advantageous to carry debt, and suggests ways to be generous with money through charitable giving.

Read "Putting One Foot in Front of the Other—Making Progress."

Live Well in Retirement

Research shows that sufficient retirement accounts make up only part of the equation for a successful retirement. Some level of financial understanding is also necessary, and many pre-retirees lack confidence in their ability to make smart decisions about their finances.

Live Well in Retirement contains four online guides that can help your participants make the most of their retirement accounts and bolster their confidence. The guides are designed to help your participants formulate their retirement goals, develop a spending strategy, and manage their health care costs, all while supporting their physical and mental health.

The four guides are:

  • My road map to retirement.

  • Make the most of my savings.

  • The basics of health care planning.

  •  Be healthy and happy in retirement.

Live Well in Retirement offers your participants education, guidance, and action plans to help them develop the right budget for their lifestyles.

Read "Successfully, Not Stressfully: Living Well in Retirement." 

The benefits of financial wellness

There are important benefits to achieving financial wellness. It helps your participants take advantage of new saving and spending opportunities, helps protect them when they’re blindsided by the unexpected, and can help build greater wealth.

But overall, financial wellness can help alleviate stress. And if that’s a goal your participants are striving for, help them with Vanguard’s Guide to Financial Wellness.  It’ll get them well on their way to a brighter financial future. 


  • All investing is subject to risk, including the possible loss of the money you invest. 
  • When taking withdrawals from a tax-deferred plan before age 59½, you may have to pay ordinary income tax plus a 10% federal penalty tax. Nonqualified withdrawals from a health savings account may be subject to taxes and a 20% federal penalty tax.