When I started writing this blog last summer, I shared that our research had identified overwhelming levels of financial stress among employees. We had found in that quarter, that in light of the financial meltdown, employees had resorted to short-term money management and were ignoring their retirement savings - and of course, we were worried. What future crises did employees face if they didn't start paying more attention to their retirement?

In our 2009 Year in Review, we spotted a theme: 2009 was really a year of failure and redemption for American employees. As plan providers cut their matches, mandated furloughs and took action necessary to manage their businesses, employees were hit from all sides in this recession: losing jobs, losing retirement savings and struggling to get by and pay the monthly bills.

Participants went through a phase of panic and short-term focus to a phase of realization that now was the time to take control of their financial situations and build their wealth again. Now, they are beginning to realize they can't control the swings in the market or the actions of their employers, but they can control how they spend, save and invest their money.

Until recently, it has taken consumers a while to adapt to these changes, with many not saving enough for retirement or health care. This year, however, the economic crisis gave consumers a wakeup call and they began to dramatically shift their perspective - planning for the worst, rather than only hoping for the best.

Debt and budgeting questions mirrored each other more closely than ever before in the 10 year history of tracking calls at 34 percent (debt calls) and 35 percent (budgeting and savings calls), which indicates that employees are taking steps to cut their expenses and build their savings again.
Investing calls fell 5 percent from Q4 2008 to Q4 2009 and retirement calls remained low at 8 percent showing employees are still focused on short-term money management.

For sponsors and participants alike, this is a light at the end of the tunnel. Participants' new attitudes toward how they manage their finances will become an opportunity to encourage them to build their savings and invest more.

For the Financial Finesse's full 2009 Year in Review research report, please e-mail ThinkTank@financialfinesse.com.

Instant Insights /

2009: The year of failure and redemption for plan participants

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