Half of Employees Would Assume a More Active Role in Their Finances if Their Company Offered an Annual Review or Personalized Action Plan
Released today, a new study finds that 56 percent of employees are stressed about their financial situation. The latest Bank of America Merrill Lynch Workplace Benefits Report reveals that among those who are stressed, 53 percent say it interferes with their ability to focus and be productive at work. The study also found that employers can play an important role in improving the financial lives of their employees. Of employees who participate in a retirement savings plan, 67 percent say their employer was influential in getting them to save for retirement.
“Stress over personal finances extends into the workplace, impacting employees’ productivity, health and overall well-being,” said Lorna Sabbia, head of Retirement and Personal Wealth Solutions at Bank of America Merrill Lynch. “This confirms our dedication to working with employers to help employees navigate financial concerns and improve their financial wellness.”
Based on a nationwide survey of more than 1,200 employees participating in 401(k) plans at companies of all sizes, the report explores attitudes of employees on key financial topics, examines their needs and concerns, and offers insights for employers to drive employee engagement. Key findings include:
For the second year in a row, the majority of employees indicate that they are optimistic about their financial future. Despite sustained optimism, however, many employees still have concerns about their financial security. In particular, women surpass men with their worries about having to work longer than they had hoped (61 percent of women vs. 51 percent of men) and needing to support family members (46 percent of women vs. 38 percent of men).
The study finds that major life events can have a profound impact on employees’ financial situations, compounding the financial stress. Employees cite buying a home, losing a job and dealing with a serious illness among the life events that have the greatest impact on their finances. Further, the study reveals gaps in financial preparation for such events, including 29 percent of employees who were not prepared for the financial consequences and 47 percent who underestimated the financial impact.
This year’s study again finds that employees look to their employers to help manage several aspects of their financial lives. Half of employees rank saving for retirement as the financial matter they need help with the most. The study also found that support from employers is paying off.
“Employees are looking to their employers as a resource in helping them manage a broad range of financial matters,” said Sylvie Feist, director of financial guidance services at Bank of America Merrill Lynch. “Employers can best meet this call for help by offering programs that address a wide range of financial needs, such as education on building better money habits and access to financial advisors who can offer personalized guidance and more holistic services.”
Rising health care costs continue to be a key source of stress for employees. A growing number of employees indicate they have experienced an increase in health care costs, which is up 10 percentage points since 2015 (79 percent in 2016 vs. 69 percent in 2015). Among employees who have experienced increasing health care costs, 56 percent are contributing less to their financial goals as a result.
Amid growing concerns over health care costs, employees place great value on the health benefits provided by their employer. In fact, employees rank their health benefits as their top employer benefit (40 percent), followed by their 401(k) plan (31 percent).
Boston Research Technologies conducted an online survey with a national sample of 1,242 employees between September 22 and October 7, 2016, on behalf of Bank of America Merrill Lynch. To qualify for the survey, employees had to be current participants in a 401(k) plan; the plan did not have to be provided by Bank of America Merrill Lynch. Bank of America Merrill Lynch was not identified as the sponsor of the study.
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