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5 Surprising Symptoms of Financial Stress (And 5 Helpful Solutions) Read it here.

What Tops Financial Stress for Employees?

What Tops Financial Stress for Employees?

by | Dec 11, 2018 | Blog

What tops financial stress for employees? Retirement and student loan debt, among other financial issues, worry employees enough to inhibit productivity, but financial wellness programs can help them take control and regain focus at work.

John Hancock released their annual Financial Stress Survey this week and the findings are worrisome. An overwhelming majority (69%) of American employees experience financial stress. Over 70 percent of them worry about personal finances at work (costing employers up to $2,000 annually per employee in lost productivity).

High levels of financial stress manifest through physical symptoms like anxiety, lack of sleep and a feeling of being overwhelmed. Nearly 90 percent of workers feel there is a social stigma associated with not being financially well, which could motivate them to conceal symptoms of financial stress.

Employers might not notice when employees are highly stressed about finances if they hide it well, and finances aren’t a topic employees are comfortable bringing up with their supervisors. Surveys like these give insight into how employers can better help employees by targeting the issues that affect them most through effective financial wellness programs and benefits.

What Tops Financial Stress for Employees?

Close to 80 percent of employed Americans are concerned about retirement savings and student loan debt. More than 60 percent of workers are concerned with keeping up with basic expenses, like monthly rent payments. Others are stressed about their overall financial situation and a lack of emergency savings.

Most Americans think getting financial advice at work would reduce their stress and more than 60 percent believe it would help them start saving more for retirement. Employees think employers can help them most with financial issues like retirement income preparation and Social Security and Medicare claiming. Roughly 30 percent think employers can help them with debt counseling or buying a house.

Employers recognize today’s American employees experience high levels of financial stress and are looking for ways to improve health and wellness offerings in this vital area. New solutions, like the creation of HRAs, and the rise of student loan benefits help employees deal with specific financial issues and have the potential to be incredibly successful in their respective areas. Their specificity is also a drawback. Employees in poor health or without student debt won’t benefit from those solutions, but they’ve surely got their own unique financial stressors.

Expansive financial wellness programs that give employees the tools and support to improve the issues affecting their overall financial wellness, versus those that tackle singular financial issues, are likely to make the most difference. Employees are able to reduce their financial stress by using and applying knowledge from their financial wellness program and eventually, will start to reach their financial goals.

More on Financial Stress and Financial Wellness Programs

5 Must-Have Benefits for Millennial Employees

How Does Financial Wellness Affect Health?

5 Fast Financial Stress Statistics

Hiring Trends to Watch in 2020

What Is Financial Literacy and Why Is It Important?

4 Big Employee Benefit Trends for Family Planning

How Can Financial Wellness Be Improved?

Top 10 Employee Benefits for 2020

 

Financial Support Limits Retirement Readiness for Parents

Financial Support Limits Retirement Readiness for Parents

by | Oct 9, 2018 | Blog

Financial support for adult children limits retirement readiness for parents. The latest study from Merrill Lynch reveals that parents are sacrificing their own financial security in retirement to support children whose financial independence has been delayed.

Most parents provide financial support to adult children ages 18 to 34, according to recent research from Merrill Lynch. Incredibly, each year parents spend twice as much supporting their adult children than they do contributing to their own retirement ($500 billion spent on adult children, $250 billion in contributions to retirement accounts).

“In this new era of delayed financial independence of young people, financial planning is becoming an ongoing family project with longer and different economic interdependencies than we’ve seen before,” says Ken Dychtwald, Ph.D., CEO and founder of Age Wave.

There are 173 million parents in the U.S. and 76 million have children under the age of 18. The average cost of raising a child today to age 18 is estimated to be more than $230,000. Most new parents are surprised by how much money they spend paying for childcare and other expenses like diapers and dental work. More than 60 percent of parents encounter financial difficulties associated with parenting.

Financial Support Limits Retirement Readiness for Parents

Financial support doesn’t end when a child turns 18. A third of early adults ages 18 to 34 still live with their parents. More than 70 percent of parents say they have put their children’s interests ahead of their own need to save for retirement. Over 80 percent are willing to make a major financial sacrifice for adult children.

“While it’s tempting to help your kids get a good start, early adulthood expenses can be big-ticket items, like cars, rent and grad school tuition. If you can afford to help out, that’s great, but be clear on your intent, set clear boundaries and don’t imperil your own finances,” says Stacy Allred, managing director and head of the Merrill Lynch Wealth Management Center for Family Wealth. “Remember that one of the greatest gifts you can give your kids is financial independence and security.”

When it comes to educating children about personal finances parents are better at teaching them how to pay off debt than they are at teaching them to invest early and benefit from compounding interest. More than 70 percent of parents wish they had help teaching their children about investing. A whopping 90 percent of parents would like personal finances to be taught to children in school.

It’s difficult to educate children on personal finances when most parents experience significant financial stress themselves. Employer-sponsored financial wellness programs can make a real difference by helping parents better manage their own money so they can teach their children to do the same.

More On Retirement Readiness and Financial Stress

Baby Boomer Retirement Statistics and Financial Stress

Retirement Concerns Aren’t Boosting Contributions

How to Help Employees Save More for Retirement

Retirement Concerns: Is Financial Literacy the Solution?

Financial Support Limits Retirement Readiness for Parents

Retirement Research Will Blow Your Mind

Financial Wellness Is About More Than Just Retirement Planning Advice

It’s Easy to Help Your Employees with Retirement Planning

What Percentage of Americans Spend More Than They Earn?

What Percentage of Americans Spend More Than They Earn?

by | Oct 3, 2018 | Blog

What percentage of Americans spend more than they earn? Recent research looks at spending habits, debt, retirement security and how close or far Americans are from achieving financial wellness.

More than half of Americans spend more than they earn, according to recent joint research by the Association of Young Americans (AYA) and AARP.

Almost 50 percent have credit card debt, more than 40 percent have a mortgage or a car loan and over 30 percent have student loan debt. Close to half of them have nothing saved for retirement. The 70 percent of Americans that consider their level of debt to be problematic are right to be worried.

“As we look into the future, financial and retirement security is going to be a concern for all of us,” says AARP Senior Vice President Jean Setzfand.

The most striking finding from AARP’s report is that there isn’t as much variance on financial security by generation as is commonly thought. In particular, student loan debt has similarly affected each generation’s ability to save for retirement and life decisions, not just Millennials. Student loan debt has kept roughly 30 percent of Millennials, Gen Xers and Baby Boomers from buying a car or house. It’s kept 40 percent of Millennials and Gen Xers and 30 percent of Baby Boomers from savings for retirement. Student loan debt has kept 25 percent of Millennials and 20 percent of Gen Xers and Baby Boomers from moving from their current residence. Student loan debt is making it harder to achieve the American dream across generations.

Survey results also showed that Americans are willing to learn. Over a third sought advice from a professional financial advisor and close to 80 percent believed such advice would be very or somewhat trustworthy. This is encouraging for employers who offer or are considering offering financial wellness programs. Employees who engage with financial wellness benefits are likely to trust the program, and ideally, apply the advice from it to improve their financial situations.

“Across generations, economic concerns and financial security are a top priority for Americans,” says Ben Brown, founder of AYA.  “These findings clearly indicate that all three generations care deeply about programs that ensure long-term financial success for individuals, families, and our nation as a whole.”

Financial Wellness Research Warrants Worry

Financial Wellness Research Warrants Worry

by | Sep 24, 2018 | Blog

Research from Prudential reveals just how far Americans are from reaching financial goals, like having enough savings to get through retirement years, as well as how optimistic or pessimistic they are about their financial future.

More than half of Americans believe their financial wellness is below average based on their level of income, savings, assets and debts, according to Prudential’s first-ever Financial Wellness Census. Out of 22 common financial goals, most Americans only have two under control: staying in their home when they retire and keeping up with current expenses.

“Our relationship with money can affect our physical health, stress levels and state of mind, family dynamics and even our performance at work,” says Stephen Pelletier, executive vice president and chief operating officer of Prudential’s U.S. based businesses. “Only by listening can we truly learn what people need to help them get on the path to financial wellness and stay on the right track throughout their lives.”

Almost a third of Americans think they are better or worse off financially than they actually are. Nearly 20 percent perceive themselves to be in good financial shape despite having a low level of objective financial health. Over 10 percent of those with high levels of objective financial health are still pessimistic about their finances.

Respondents ranked having enough savings to last through retirement years and the ability to pay for future healthcare needs as the most important financial goals. Surprisingly, for more than 70 percent simply keeping up with current expenses is their primary financial focus.

Even though less than half of Americans are on track to achieve their financial goals, more than 50 percent are optimistic that they will eventually achieve them. Prudential’s report offers a reason for this positivity discrepancy, finding that working with a financial advisor correlates with a more positive outlook on financial health.

It’s not enough to offer retirement benefits if employees don’t know how to manage and grow their 401(k) (or finances in general). “The journey to financial wellness is deeply personal,” says Niharika Shah, Prudential Financial’s vice president of brand marketing. Financial wellness benefits that include personalized support features help employees learn more about improving their financial health, reduce their financial stress and bring them closer to achieving their financial goals.

What Does Financial Wellness Look Like for Women?

What Does Financial Wellness Look Like for Women?

by | Sep 7, 2018 | Blog

Pay equity is a huge barrier to women’s financial wellness in the workplace, but it isn’t the only one. Most women haven’t used retirement calculators and don’t have backup plans if forced into retirement. They’re not going to ask for help, but employers who provide the right tools can help them help themselves.

Everyone knows: Women make up 46.8 percent of the American labor market, but they still earn an average of 20 percent less than men in the same position. Pay isn’t equitable by any stretch of the imagination.

Even in situations where women and men are offered the same job, women are initially offered salaries up to 45 percent less than what men are offered, according to research from Hired. Hired’s research underscores how critical it is for women to advocate for themselves in negotiations until legislation and corporate policies better support pay equity.

Pay equity isn’t the only issue women face when it comes to financial wellness. Research from Transamerica Center found that less than 10 percent of women have used a retirement calculator and barely 20 percent had a backup plan if they were forced into retirement sooner than expected, either because of job loss, health issues or family obligations.

Why? An argument posed in a MarketWatch article claims that “societal norms and cultural messages undermine [women’s] ability to gain financial literacy and investment expertise.” Research shows that for women, finances, especially issues with personal finances, are generally associated with emotions of embarrassment, shame and fear. Even if women know they need to be more financially literate, they might not ask for help in gaining the knowledge.

Companies know they have a serious problem when it comes to women, pay equity and financial wellness. While both men and women feel financial stress, women feel higher levels of it. And, it causes more complications in their work lives.

That’s where there’s an opportunity for employers to help. Employer-sponsored financial wellness programs like Best Money Moves can bypass cultural barriers and social norms to give women access to the tools they need to measure their financial stress, learn how to manage their money around issues ranging from student loans to mortgages, elder care to relationship issues, and get on track with saving for retirement. The best part about employer-sponsored financial wellness programs is that it takes away any shame or embarrassment associated with asking for help and simply provides the best tools for employees to help themselves.  

Employers might also consider adding policies that pledge equal pay for equal work, especially if they’re in the process of recruiting more women. And with unemployment at 3.9 percent (nearly an all-time low), it doesn’t hurt to work on policies that will attract a demographic that makes up nearly half of the workforce.