What is Financial Wellness?

When you think about wellness – or being well – your mind might automatically go to your physical or mental health. But, financial wellness can be just as important. MERS defines being financially well as managing your day-to-day spending, controlling debt, having money set aside for an emergency, and having a financial plan for the future. Taking control of your finances for both the present and future increases your likelihood of a successful and enjoyable retirement, and relieves the stress and burden that financial uncertainty can cause.

Tracking Financial Wellness through Financial Fitness

The Financial Fitness tool is available to MERS participants through myMERS. This tool includes a series of workouts you can engage in to help determine your current Financial Fitness Score in the areas of emergency savings, debt management and planning for the future along with the ability to create a budget to manage your day-to-day spending and as a bonus, workouts to help with insurance and health savings account management (if applicable).

Your Financial Fitness Score

We all need motivation when we’re completing tasks, which is why this tool utilizes a point system to help keep you on track and entice you to take steps to increase that score.

After you complete some initial information in each of the workouts, you will be presented with your personal Financial Fitness Score.

To increase your financial fitness score, or gain points, you need to add to your total net worth. This means paying down existing debt and not adding more new debt, as well as saving for your future.

The purpose of the Financial Fitness score and each individual workout is intended to be a gauge to determine where you are on your financial fitness journey.  The score is not intended to illustrate whether something is good or bad, it is simply a tool to assess the current situation and monitor progress as you achieve greater financial fitness.


 Financial Fitness Tool Overview (Video)

Locating your MERS Programs in myMERS

 Using Your myMERS Account Overview (Video)

 myMERS Overview Guide (pdf)

Workout Overviews

Emergency savings is often easy to overlook because it’s the “what if” — the perception that it will never happen to me. It is important to focus on building emergency savings, even if it’s in baby steps. Remember, if you lose employment tomorrow, none of the other financial goals you may have will matter.

Depending on your spending habits and life situation, emergency savings should generally be three to nine months’ monthly income. The initial target is set at a default value of three month’s income, but this can be changed.

Scoring for Emergency Savings Workout

Jane earns $50,000 annually and has linked her $2,000 savings account to her emergency savings workout. There are 20 points available to Jane for this workout. Her score for this workout is calculated as follows:

Emergency Fund Target = $50,000 x .25 (three months = 1 quarter of a year) = $12,500
Funded Percentage = $2,000 ÷ $12,500 = 16.0%
Score for this workout = 16.0% x 20 pts = 3 pts

Debt is not intrinsically bad, but too much of the wrong kind of debt is. If all debt was avoided, people would never own a house or even a car. However, too much debt or even a little debt with high interest rates, such as personal loans or unpaid credit card debt, can quickly ruin one’s finances. The goal of debt management isn’t to avoid all debt, but rather ensure the right types of debt are used wisely. The key to distinguishing good debt from bad debt is to determine if the debt expense will leverage one’s net worth in a positive or negative way.

Scoring for Debt Management Workout

“Good Debt” is incurred to finance something that will increase in value or will enable you to increase your wealth. For example, a mortgage not only allows you to secure a place to live, the home also has the potential to increase in value over time. While a motor vehicle actually decreases in value over time, an auto loan can still be considered good debt if it enables you to get to work, earn a living, and economically perform daily tasks that would be more expensive without your own transportation.

“Bad debt” provides a negative return on investment. So-called “payday loans” and credit card debts are an example of this. Because they are unsecured, the interest rates are often quite high, so that a late payment can make the interest owed on the loan greater than the amount initially borrowed. Even good debt can become bad debt when mishandled.

Your total debt should be considered in relation to your ability to pay it off. A debt of $25,000 may be a real burden to someone who is just starting out with no savings or investments, but it is much more manageable for someone earning $100,000 a year with an equal amount of savings. Rather than simply comparing total debt to total income, Financial Fitness modifies the outstanding balances to reflect the type of debt represented. Using the table below, “good debt” is counted less than its dollar amount while “bad debt” is increased over its dollar amount.

Loan Types and Multipliers
Loan Type Mortgage Car Loan Student Loan Credit Cards Payday Loans Other
Multiplier 0.33 0.75 1 1.20 30 1

This adjustment serves two purposes, (1) to more accurately reflect the relative value of the various types of debt and (2) clearly show which types of debt should be quickly paid down or off. By focusing repayment efforts on the higher interest debts, you can more rapidly improve not only the Debt Management workout score but overall Financial Fitness as well.

The score for this Workout is: (Annual Income – Adjusted Debt Value) ÷ Annual Income

Jane has an $80,000 outstanding mortgage on her home and $2,000 in credit card debt. Her annual income is $50,000. Jane has a high deductible health insurance plan, so for her, 25 points are available in this Workout (see HSA Workout, below, for details).

Adjusted Mortgage Value = $80,000 x .33 = $26,400
Adjusted Credit Card Debt = $2,000 x 1.20 = $ 2,400

$28,800 Total Adjusted Debt

Adjusted Ratio = ($50,000 – $28,800) ÷ $50,000 = 42%
Score for this Workout = 66.9% x 25pts = 11pts

Given the difference between the factor for mortgage debt (0.33) and the factor for credit card debt (1.2), Jane can more quickly improve her score (and overall financial health) by paying down the credit card debt. The mobile app/online technology will point this out and also use a color indicator by each outstanding debt type to show which debt should be initially targeted (red first, yellow second, green last).

Planning for retirement generally means saving and investing in your employers’ retirement plan, but you can also save in tax deferred accounts like IRAs or even taxable accounts.

As with the other workouts, you can designate which accounts to link for this purpose, or can manually add balances for non-linked accounts.

Scoring for Retirement Planning Workout

Financial Fitness evaluates the probability of sustaining retirement income at the desired level through your life. Generally, you should seek at least a 75% chance of success. The calculation is based on your current savings rate, investment balance and allocation, desired retirement age, and desired income replacement. You should include any employer match as part of your deferrals. You will be asked to select the equity/fixed income allocation most similar to your actual holdings from a list. Financial Fitness also includes projected Social Security benefits starting at retirement, and any pensions or annuities you enter (outside of your MERS accounts, which will automatically be entered for you). The latter are added to the calculation in the first year in which they become payable.

Although planning for retirement might seem complex, it essentially boils down to three main topics of conversation.

  • Asset Allocation. Do you have the right mix of assets to achieve your goals?
  • Risk Tolerance. Is your portfolio optimized? You may be taking on too much risk, or not enough risk, depending on your age
  • Your Reality. Where are you at and where do you want to be? Much of this depends on when you want to retire (early or later) and what your retirement lifestyle will be. Do you need less income because all your assets will be paid off? Perhaps you need more income because you plan to travel.

The probability of success is determined by the percentage of successful trials resulting from 1,000 Monte Carlo simulations.

A 90% chance of success is considered a perfect score so any probability at or above this level receives full score. Probabilities below 90% are scored based on their proportion to 90%.


Jane is 28 years-old, makes $50,000 a year, and would like to receive $5,500/mo in retirement income when she retires at age 65. She is deferring 8% of her paycheck. Her employer matches the first 3% of her deferral dollar-for-dollar, so her total addition is 11% (8% + 3%). Her retirement savings currently total $10,000 and are invested for growth with 70% allocated to stock investments. Jane’s life expectancy is 76 so Financial Fitness will measure her probability of funding her retirement through age 81 (76 +5). Using these inputs, 1000 Monte Carlo simulations are run, and 370 are considered successful.

Probability of Success = 370 ÷ 1000 = 37%

Score Percentage = 37%/90% = 41.1%

Score for this Workout = 41.1% x 25 pts = 10pts

The types of insurance you may need depend (primarily) upon your age, possessions and dependents. However, each person’s situation is unique.

Scoring for Insurance Management Workout

Based on your age, possessions, and dependents, Financial Fitness determines your Insurance Score by asking a few simple questions about the types of insurance you currently have and comparing them to the types typically needed. As you progresses through life, your insurance needs change. You will be encouraged to periodically return to the insurance management workout to update your score and reflect on your present situation.

Because the need for various insurance products changes throughout one’s life-cycle and financial situation, Financial Fitness assigns factor weights based on these characteristics. In instances when a particular insurance product is not required (e.g., someone who rents an apartment does not need homeowner’s insurance), the product is given a factor weight of zero and it is not considered in the scoring. The overall insurance management workout carries 20 points, and those points are allocated to the suggested insurance products according to their factor weights. Ownership of a suggested insurance product captures all factor-weighted points for that product. Lack of ownership results in zero points for that product. The sum of all factor-weighted points earned yields the total workout score.

Types of insurance and associated factors
Insurance Criteria Weighting Factor Equals
Short-Term Disability Client is 62+ years-old


Emergency savings fund = monthly income x 6


Emergency savings fund = monthly income x 3


Everyone else


Long-Term Disability Client is 62+ year-old


Everyone else


Medical Insurance Everyone


Life Insurance Client is single with no dependents


Everyone else


Auto Insurance Client owns/drives a car


Everyone else



Homeowners Insurance

Client owns a home


Everyone else


Renters Insurance Client has personal or business property in rental property


Everyone else


Long-Term Care Insurance This product is not scored and does not receive an assigned factor weight. However, for those over age 55, a tip will be shown encouraging them to consider their need for long-term care insurance



Jane is 28 years-old, not married, and has no children. She owns her home and drives a car. She has less than three months of income in her emergency savings. She has medical, life, and long-term disability insurance through her employer.

Example workout’s calculated score
Factor Weight Own Factor Score
Short-Term Disability 3 No 0
Long-Term Disability 3 Yes 3
Medical Insurance 3 Yes 3
Life Insurance 1 Yes 1
Auto Insurance 2 Yes 2
Homeowner’s Insurance 2 Yes 2
Renter’s Insurance 0 No 0
Totals 14 11


Workout Score = User’s Points ÷ Total Available Factor Points x Total Workout Points

Jane’s workout score = (11 ÷ 14) x 20pts = 15pts

If you participate in a High Deductible Health Plan (HDHP), you may be eligible to contribute to a Health Savings Account (HSA). If you do not participate in a HDHP, or if you have an HSA but are over the age of 65, you are not eligible to complete this workout.

Scoring for Health Savings Account Workout

The annual HSA deferral maximums can be indexed each year for inflation. For 2021, an individual can contribute up to $3,600 for an individual plan or $7,200 for a family plan. HSA owners over age 55 can also contribute an additional $1,000 to either plan. In light of the tax advantages and relatively low contribution maximums, the HSA Workout encourages users to reach maximum annual funding each year. Scoring for the workout is based on the percentage of maximum funding achieved for the current year.

If you are contributing an equal periodic amount, your HSA Workout score will rise proportionately throughout the year. If funding is sporadic or all at one time, the HSA Workout score will immediately reflect the new percentage. In any case, the score resets to zero when a new calendar year begins. The reset is unique to this workout.


Jane is enrolled in her employer’s HDHP and is eligible for an HSA. Because she is not married and has no other dependents, she is only eligible for an individual HSA. Jane is 28 years old so she is not yet eligible to make the additional $1,000 annual contribution so in 2021 is limited to $3,600. So far this year she has contributed a total of $1,200 to her HSA.

Workout Score = Planned YTD Funding ÷ Annual Max Funding x 10pts

Jane’s workout score = $1,200 ÷ $3,600 x 10pts == 3pts