Women Report Being Less Financially Secure and Having Less Retirement Savings Than Men
Released today, a new study finds the vast majority of employers and employees1 agree that financial wellness programs offered in the workplace are effective. However, participation may be hindered by a disconnect between employers and employees on what matters most to support financial wellness. About one-third (31 percent) of employees participate in these programs, despite the fact that many report struggling financially. The 2018 Bank of America Merrill Lynch Workplace Benefits Report – the eighth annual edition of the series – tracks the growing importance of workplace financial wellness programs, pointing to personalized advice and planning as key to improving participation and employees’ financial wellness.
The report examines how employers and employees feel about financial wellness, their expectations of one another, and the types of resources employees want in the workplace. Based on a nationwide survey of 657 employees who participate in 401(k) plans and 667 employers who offer both a 401(k) plan and financial wellness program, key findings include:
“Employers report financial wellness programs are paying off – leading to greater employee satisfaction, higher productivity and other benefits for employees and the firms they work for,” said Lorna Sabbia, head of Retirement and Personal Wealth Solutions at Bank of America Merrill Lynch. “However, there is still room for progress in increasing employee participation.”
“Bank of America Merrill Lynch is dedicated to collaborating with employers to provide relevant and timely education, tools and guidance that can drive widespread participation, support employees’ growing financial wellness needs and help them live their best financial lives,” Sabbia adds.
The report finds that women are less financially well than men, underscoring the need for financial wellness programs that are tailored to a woman’s financial journey and life path. Forty-seven percent of women say they are less than financially well, compared to 29 percent of men.
The study also uncovered a gap in women’s retirement savings. Female employees contribute less to their 401(k), and they have $119,000 in investable assets on average, compared to $196,000 for men. The gender savings gap is particularly concerning given the increased financial demands placed on women, including higher health care costs and more years of retirement to fund, as uncovered in the recent Merrill Lynch Women & Financial Wellness: Beyond the Bottom Line study.
The report finds that employees are looking to their employers to help manage their financial lives. The study also explores what employees seek in an employer-sponsored financial wellness program:
“Employees are speaking loud and clear about their desire for programs that give them a holistic, personalized and measurable roadmap for achieving financial wellness,” said Lisa Margeson, head of Retirement Client Experience and Communications at Bank of America Merrill Lynch. “At Merrill Lynch, we are dedicated to pioneering programs that not only address employees’ wide-ranging financial needs, but also tangibly measure results and fully account for employees’ diverse financial goals, challenges, life paths and experiences.”
1 95 percent of employers who offer the program and 91 percent of employees when offered the program
Boston Research Technologies interviewed a national sample of 657 employees who participate in 401(k) plans from December 15, 2017 through December 27, 2017 and 667 employers who offer both a 401(k) plan and a program designed to help improve financial wellness from December 15, 2017 to January 3, 2018. To qualify for the survey, employees had to be current participants of a 401(k) plan and employers had to offer a 401(k) plan option. Neither was required to work with Bank of America Merrill Lynch. Bank of America Merrill Lynch was not identified as the sponsor of the study.
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