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LendEDU Finds Student Debt is Down, But Financial Stress is High

LendEDU Finds Student Debt is Down, But Financial Stress is High

by | Aug 16, 2017 | Blog

In this week’s Best Money Moves roundup, we take a look at news stories and new research studies that may impact employee benefits and HR issues. We hope you find this news roundup helpful, and we’d love your feedback.

For new graduates entering the workforce, student debt is still a major cause of financial stress.

The average student debt per borrower for the Class of 2016 is $27,975, according to LendEDU’s second annual Student Loan Debt by School by State report. That number is actually down 1.5 percent from 2015, but it isn’t quite enough to lift the stress from graduates starting their careers with significant student debt.

The five states with the highest average student debt per borrower are probably not what you expect. Most of them are on the East Coast, and for all of them, the proportion of graduates who carry student loan debt is 60 percent or higher — some even reaching as high as 75 percent. Take a look:

  1. Pennsylvania
    ($35,185 average debt per borrower, 69 percent of grads have student debt)
  2. New Hampshire
    ($35,143 average debt per borrower, 75 percent of grads have debt)
  3. Delaware
    ($33,650 average debt per borrower, 63 percent of grads have debt)
  4. Connecticut
    ($32,326 average debt per borrower, 60 percent of grads have debt)
  5. South Dakota
    ($31,518 average debt per borrower, 75 percent of grads have debt)

It would be easy for employers to read the headline “student debt is down” and think of it as good news — and it is. But looking more closely at the numbers, it’s clear that student debt is a serious problem that’s not going away anytime soon. Shouldering the burden of student debt impacts your employees’ stress levels — and overall well-being — every single day.

Understanding your employees’ financial needs is the first step to helping them overcome these hurdles and stay more focused, productive and happy at work.

Financial stress is the top cause of lost productivity. Shifting the perspective of your employee benefits program to address it isn’t just good for employees, it’s good for business.

It’s almost time to make big decisions about your 2018 benefits offerings. While the possibility of health care reform generates a lot of uncertainty among today’s workforce, there are ways you can prepare them for the long term.

College costs are increasing far faster than income growth. It’s no wonder that students struggle to pay off hefty student loan bills for years afterward. Luckily, parents can help.

Voluntary benefits are growing in popularity, but many employees don’t really know or understand the options available.  Five ways to educate your team.

Is your company “aging-friendly?” Almost 70 percent of employers believe their employees won’t be able to afford to retire at 65. It’s time to adapt to your older employees’ needs.

Language training improves employee engagement and retention. Research shows that 70 percent of employees with language training feel more confident in their work and interactions with their teams. Is it right for your employees?

Nearly 30 percent of the U.S. population is responsible for the care of a family member. A survey by Northeast Business Group on Health and AARP ranked caregiving as one of the top 10 employee health and wellness benefits priorities for employers. Here’s how you can assist those who assist.

Are your employees leaving money on the table? Among employees who participate in 401(k) programs, roughly one in five don’t take advantage of their full employer match. That missing money adds up.

Not all states are created equal when it comes to health care. A new report from WalletHub, 2017’s Best and Worst States for Health Care, compares states across three areas: cost, accessibility and outcome. Where does your state rank?

 

Have something to add? Email info@bestmoneymoves.com.

Retirement Literacy Quiz: Are You Really Prepared?

Retirement Literacy Quiz: Are You Really Prepared?

by | Jul 12, 2017 | Blog

In this week’s Best Money Moves roundup, we take a look at news stories and new research studies that may impact employee benefits and HR issues. We hope you find this news roundup helpful, and we’d love your feedback.

Retirement literacy is lower in this country than most people think.

Each day, about 10,000 people hit the magical retirement age of 65. But most people have no idea how much money to set aside for the future.

In a recent retirement literacy survey conducted by the American College of Financial Services, only 5 percent of respondents got a grade higher than a “C.”

A lack of savings is one of the biggest sources of financial stress, and there are few things more stressful than worrying about running out of money too early in your golden years. To know how much money you’ll need for a financially stable retirement, it’s good to understand some basic (and often uncomfortable) facts – like how long you can expect to live.

Think you know how to build a nest egg that will last? Test your retirement literacy with this six-question quiz.

Baby boomers aren’t saving enough for retirement. While they expect to need about $658,000 in their retirement accounts, they’re only averaging $263,000 — less than half of what they’ll need.

Job insecurity makes employees more likely to get sick. A new study from Ball State University found people who reported job insecurity were more susceptible to a number of physical and mental health problems. Help your employees feel more secure during times of workplace transition.

How much should 20-somethings be saving for retirement? It can be hard to focus on a retirement that’s decades away. Here’s what millennial employees want to know about retirement planning.

How can you build a better employee training program? Focus on the areas where your employees struggle most. Learn how to identify where your team could improve.

Which benefits bring in top talent? A top-notch benefits package can help a company attract and retain workers. Check out 11 benefits for which employees will leave.

Retirement plans are leaking money, jeopardizing your employees’ retirement security. The culprit? Loans and early withdrawals. Help your employees save more.

Uber’s workplace struggles offer a great example of what not to do. How can you build a culture of diversity and inclusivity in your workplace? Take a hard look at your office culture.

Employees don’t quit out of the blue. There are usually signals visible long before they put in their two weeks’ notice. Seven signs your employees are leaving.

Building a new well-being program for your employees? Make sure you’re getting the most impact from your investment. Three traits of successful well-being programs.

 

Have something to add? Email info@bestmoneymoves.com.

Why Millennials’ Financial Health is Stressing Them Out

Why Millennials’ Financial Health is Stressing Them Out

by | Apr 26, 2017 | Blog

Millennials are less satisfied with their overall financial health and face more financial stress than other generations, a new study found.

Only 20 percent of Millennials are satisfied with their financial health, according to financial services technology company Fiserv’s Expectations and Experiences Survey.

That’s significantly lower than the overall population, in which 36 percent of people are satisfied with their financial health.

Some of Millennials’ financial stress comes from the economic environment that was in place when they first entered the workforce, while other aspects stem from financial concerns previous generations didn’t face, said Matt Wilcox, senior vice president of marketing and strategy innovation at Fiserv.

“I think when you think about this financial crisis in ‘07, ‘08 [and] ‘09, that was during a time where a lot of the Millennials were in school or getting out of school,” Wilcox said. “I think that created an unease in the marketplace for them.”

This makes Millennial consumers less likely to make big purchases and go into debt, although they’re already carrying significant debt, Wilcox noted.

“Student loans are a big component [of their financial lives],” he said. “I think they’re starting in a bit of a hole, whereas other generations didn’t have that concern. It’s not necessarily that they don’t know how to manage their finances, as it is they’re starting from a negative perspective.”

Still, the overall population isn’t doing so great when it comes to financial health. If 36 percent are satisfied with the state of their finances, that means 64 percent – almost two-thirds – aren’t.

Fiserv also found that 39 percent of people surveyed would have trouble coming up with the cash to pay back a $500 loan today. If they got an unexpected $1,000 windfall, almost half (47 percent) would use it to repay a debt.

So what can be done to reduce these feelings of financial stress and insecurity?

“In my opinion it’s about more education,” Wilcox said. “The mindset is, if they get a check for $500 then they have $500 to spend and they don’t understand that that has to last for, say, two weeks.”

“They just haven’t had that core [financial literacy] foundation,” he added. “I think you’re gonna see more and more financial literacy programs and required courses take shape at the junior high, high school and college level. We’re all better off if we have a better understanding of how to manage our finances.”

Northwestern Mutual: Financial Stress Looms Despite Increasingly Optimistic Economic Outlook

Northwestern Mutual: Financial Stress Looms Despite Increasingly Optimistic Economic Outlook

by | Apr 6, 2017 | Blog

Americans are feeling increasingly optimistic about the country’s economic outlook, but financial stress could be on the horizon, thanks to a lack of planning for a secure financial future.

According to Northwestern Mutual’s 2017 Planning and Progress Study, 43 percent of Americans say the U.S. economy will be better this year than last, up from 31 percent who said the same thing last year. And fewer people believe there will likely be more financial crises on the way: 67 percent of this year’s respondents versus 76 percent in 2016.

This optimism continues on a personal level, as 72 percent say they feel financially secure. On the flip side, however, this means more than a quarter – 28 percent – feel at least some level of financial insecurity. More than half feel their financial security will change in the next year, with 38 percent feeling they’ll be more financially secure next year and 19 percent saying they’ll be less secure.

While most Americans have a positive economic outlook for the next year, their long-term view is a little less optimistic. This year, less than half – 48 percent – of surveyed adults said the “American Dream” is attainable for most people. In 2009, the first year Northwestern Mutual conducted this survey, 58 percent said it was attainable.

“It appears we’re at a financial flashpoint in America,” said Rebekah Barsch, vice president of planning at Northwestern Mutual. “In the near-term, people clearly feel a little better about the stability of the U.S. economy. At the same time, there’s a drop in longer-term optimism around the attainability of the American Dream.  Combined, it’s a mix of improvement in the moment with uncertainty about the future.”

Perhaps because of their overall rosy economic outlook, the study found that many Americans are being less disciplined in their financial habits and aren’t setting up long-term financial plans.

Even though most Americans think we’ll face another financial crisis at some point, only half think they need a financial plan that anticipates up and down cycles in the economy, down from 57 percent last year. Also, not everyone who thinks they need a plan designed for highs and lows has one – only 43 percent said they currently have a retirement or financial plan designed to endure market cycles and only 41 percent said their long-term saving strategy includes a mix of high- and low-risk investments, down from 47 percent last year.

Retirement is one of the biggest sources of financial stress among American workers, but too many employers simply offer a 401(k) or similar retirement plan and call it good. Workers need to understand how these accounts work and how they fit into a larger long-term financial plan. It’s up to employers – and their HR executives, in particular – to make sure their employees know how to use their retirement benefits and help them build a plan that will reduce financial stress, weather market fluctuations and ensure a comfortable retirement.

How Will Trumpcare Change Your Employee Benefits Package?

How Will Trumpcare Change Your Employee Benefits Package?

by | Jan 25, 2017 | Blog

In this week’s Best Money Moves roundup, we take a look at news stories and new research studies that may impact employee benefits and HR issues. We hope you find this news roundup helpful, and we’d love your feedback.

President Trump has been clear about his plans to repeal the Affordable Care Act – otherwise known as Obamacare – and replace it. But what will Trumpcare look like and what will it mean for the thousands of American businesses who provide healthcare benefits to their employees?

Trump has been vague so far about what his plan would entail and how it would differ from current healthcare industry regulations. This means employers can’t plan ahead for any changes the administration may put into place which would affect their employee benefit offerings.

On his first day in office, Trump made his first move to weaken Obamacare by signing an executive order for government agencies to “waive, defer, grant exemptions from, or delay the implementation of” any part of the law that imposes a financial burden on government.

Here are five ways Trump’s healthcare policies could impact the employee benefits industry.

New year, same financial problems. Many Americans resolved to get their finances in order in 2017, but three-quarters still report feeling financially stressed, according to Center for Retirement Research at Boston College. Other studies show more than one in four Americans feel threatened by debt collectors. Learn how severe the problem is for your employees.

A federal judge ruled Monday that healthcare giant Aetna lied last year when the company said its decision to pull out of the Obamacare exchanges was strictly a business decision. Judge John D. Bates wrote in his ruling that the move was a ploy to dissuade the Department of Justice from filing suit to block Aetna’s controversial merger with Humana. That merger – which would reduce competition among health insurance providers in many areas – is now in trouble.

It also signaled a possible problem with the Anthem/Cigna merger, which is under review by a different judge.

Do you know how all of the fees on your credit cards work? If not, you’re not alone. About 50 percent of Americans don’t understand everything in their credit card agreements, and that can lead to financial stress that spills over into the workplace.

What in the world is a “bleisure trip”? Also known as a “bizcation” or “workcation,” these are business trips that also include some personal time, as opposed to vacations where employees spend time checking email or finishing assignments that didn’t get done during regular working hours. Encouraging bleisure trips may help employees avoid burnout, especially if they’re otherwise reluctant to take a vacation.

While many companies think a fridge full of snacks and a few bean bag chairs will attract Millennial employees, that may be changing. The oldest Millennials are settling down, getting married and having children, which means they’re becoming more interested in their healthcare coverage and life insurance than healthy snacks and lunchtime foosball tournaments. Here’s how you can rework your company’s benefits package to fit these changing needs.

How expensive is employee turnover? According to a recent survey from Quinlan & Associates, some banks are incurring turnover costs of up to $1 billion per year as employees walk out the door. What can they do to stem the tide of leaving talent?

Some employers offer student loan repayment as an employee benefit, while others help students avoid debt in the first place. Companies including Starbucks and Chipotle are teaming up with colleges to help their employees earn a degree without racking up insurmountable student debt burdens. Learn how these programs could help your workforce.

A recent study found that 95 percent of HR executives think burnout is the biggest thing hurting employee retention, so 2017 is all about improving employees’ experiences at work. Here are four management trends we’ll see this year in the fight against burnout.

Corporate wellness programs are shifting focus from physical to mental health with things like financial stress management and mindfulness taking top priority. Read more about the top 10 corporate wellness trends for 2017.

Have something to add? Email info@bestmoneymoves.com.

It’s hard to stay on top of everything in the news. That’s why each week our Best Money Moves newsroom will bring you the most important news in financial wellness, employee benefits and financial stress. We hope you like the information and, if you do, please spread the word. For midweek developments, follow us on Twitter and on Facebook.