A vast majority of American workers are worried about their financial future, according to a new study by Bank of America Merrill Lynch.
The latest Workplace Benefits Report has revealed that American workers’ stress about their finances has increased, while confidence in their financial futures has decreased. Specifically, three in five employees today feel stressed about their financial futures, up from 50 percent in 2013.
For the study, Bank of America Merrill Lynch conducted a nationwide survey of more than 1,200 employees with 401(k) plans at companies of all sizes.
Some of the key findings of the study about employee financial stress include the following:
- More than half (55 percent) admit to needing help managing their finances, including saving for retirement and managing debt.
- About seven in 10 (69 percent) have experienced a rise in healthcare costs over the past two years, directly attributing to decreased retirement savings.
- Fifty-nine percent want help understanding how workplace financial benefits can aid in increasing their financial security.
- Nearly two-thirds (64 percent) of employees say they have increased their focus on retirement planning and saving and recognize the importance of the saving plans offered by their employers.
- About 68 percent say that financial benefit plans offered by their employers will be their largest or second largest source of income in retirement.
What You Can Do to Reduce Employee Financial Stress
With ongoing market volatility severely impacting the economy at large, it’s not difficult to understand why the heat of employee financial stress is being felt. It’s also not a surprise that employees are now looking at their employers to help them manage their financial lives.
“Given how many are struggling with today’s financial demands while planning for their future, employers are in a critical position to help their employees secure their financial future,” says Lorna Sabbia, head of Retirement and Personal Wealth Solutions for Bank of America Merrill Lynch.
“By working in close partnership with a plan provider dedicated to helping employees live better, such as Bank of America Merrill Lynch, employers can provide their employees financial wellness programs and benefits that are accessible and integrated.”
A study of employers (PDF) conducted in 2015 found that providing financial employee wellness programs can help employers identify the trouble spots that prevent employees from gaining financial security.
From a business perspective too, it makes sense to provide the right financial guidance to the employees. As Kim Kasin, financial guidance executive at Bank of America Merrill Lynch says, “By offering financial wellness solutions and addressing their employees’ needs, employers can create a culture that enables the employees to accept the assistance.”
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The level of financial literacy simply blows me away at times. We need to find ways to educate people on how basic life decisions affect their financial future. Knowledge = Power
Robert: You are right about that. It it high time now, as the economy is going into bad times… “Boom and bust” is here to stay. When will the public learn about the business cycles and Austrian economics?
I think it is not just employees but anyone who are not in control in what they are earning. These people are looking for ways on how they can make more money and reach their dreams.
You are right, Aira. At a time when financial insecurity is looming large, assistance from employers can really go a long way in boosting confidence.
There is no doubt we as an industry have to do a much better job helping employees (and individuals in general) with respect to retirement. This highlights that we must better train advisors how to help clients about retirement. This has to cover the full gamut from when they are in the savings or accumulation stage, to as they transition to retirement (conversion and consolidation) to the retirement stage (distribution and wealth transfer. And very importantly, the training to be most effective it needs to address the emotional and behavior aspects as well as the financial aspects of ‘retirement planning’.
Very good point about financial training to help employees plan their retirement. I hope employers take note.
Hmnn, I was just wondering if anyone has a clue that there is no money . That globaly everyone is broke. so what about these 401k plans.