retirement Archives

How Financial Stress Affects Gen X at Work

by AllyMauch | Sep 4, 2019 | Blog

How financial stress affects Gen X at work. Gen X has the most overall debt compared to any other generation and they’re bringing their financial stress to work.

Gen X — roughly those between the ages of 38 and 58 — is often cited as the “forgotten generation” sitting between the more famed Millennials and Baby Boomers. However forgotten they may be, those in Gen X are facing a whole host of unique financial stressors that employers need to address.

In addition to carrying the most credit card debt and being the least happy at work compared to all other generations, Gen Xers are worried about being able to retire and only 60 percent feel confident in their finances. Below, we break down the top financial stressors affecting Gen X workers.

Gen X’s Credit Card Debt Is a Big Part of Their Financial Stress

Gen X has the most overall debt than any other generation, a significant portion of which comes from credit card debt. Those between the ages of 45 and 54 have an average of $9,096 in credit card debt, and people who are 45-44 have the second-highest level of debt — $8,235. Because credit card debt typically carries higher interest rates than any other debt, the debt problem facing Gen X is particularly harmful.

To make matters worse, a study from PwC found that a majority — 60 percent — of Gen Xers consistently carry balances on their credit cards and 2 in 5 find it difficult to make their minimum credit card payments on time each month.

How Financial Stress Affects Gen X at Work

Gen Xers also report feeling the least happy at work and a quarter note better job security as their top priority for achieving future financial goals. A mere 68 percent of Gen X workers feel happy at work, compared to 74 percent of boomers and 75 percent of Millennials

This discontent at work stems from a variety of sources, including a lack of respect from employers, limited opportunities for upward mobility and sparse management and development skills training. Further, Gen X’s workplace unhappiness directly connects to their financial stressors — about two-thirds say that their compensation at work is not keeping up with the rising cost of their living expenses.

Financial Stress and Retirement Savings

Gen X is advancing quickly towards retirement, but 67 percent say they are not confident that they will be able to retire when they want to and one-third have already withdrawn from their retirement funds to cover expenses.

More than half of Gen X report feeling significantly or somewhat behind on their retirement savings and 18 percent do not plan to retire at all, according to a survey from MetLife. Compared to Millennials and Baby Boomers, these numbers make Gen Xers the least secure in their retirement plans.

Gen Xers note financial matters as their main cause of stress, making financial wellness an essential workplace conversation given the stressors outlined above. Programs like Best Money Moves can help alleviate the problem for both employees and employers. Best Money Moves is a mobile, gamified and easy-to-use financial wellness program. It provides practical, unbiased help so employees can make smarter financial decisions and manage the debt they have.

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If you want to learn more about how Best Money Moves can bring financial wellness to your company download our whitepapers and sign up for a demonstration here.

Retirement Concerns Aren’t Boosting Contributions

by LizStevens | Sep 4, 2019 | Blog

Retirement concerns aren’t boosting contributions. Americans can expect to outlive their retirement savings by anywhere from eight to 20 years.

Retirees in the U.S. can expect to outlive their savings by anywhere from eight to 20 years, according to research by the World Economic Forum. Women have it worst and will outlive their retirement savings for at least two years longer than men.

Not saving enough for retirement is Americans’ biggest financial regret, yet less than 30 percent of workers have increased their retirement savings contributions rate this year. Over 20 percent of employees are saving less or not contributing to a retirement fund at all.

Why Aren’t Employees Boosting Retirement Contributions?

“The reasons Americans cite for not increasing retirement contributions indicate a continued lackadaisical approach to retirement savings – whether it’s complacency with current contributions, focus on other financial priorities, rising household expenses or just not getting around to it,” says Greg McBride, chief financial analyst at Bankrate.

Nearly 25 percent of employees didn’t raise retirement savings because they’re comfortable with their current contribution. Considering the $400 trillion global retirement savings gap, it’s worth wondering if those who are comfortable really have enough set aside to get them through retirement. Life expectancy for senior citizens has never been better, which means most Americans’ will need more money saved than they once thought, and that’s before factoring in costs for long-term healthcare.

Stagnant or declining income is the reason more than 20 percent of employees gave for failing to increase contributions to retirement funds in 2019. Over 15 percent of workers focused on another financial priority, like paying down credit card debt, before boosting retirement savings. More than 10 percent of employees blame rising household expenses for their failing to increase retirement contributions. Unexpected financial emergencies kept almost 10 percent of them from boosting retirement savings.

The most concerning response came from the more than 10 percent of workers who just haven’t gotten around to it. It was a more popular response for younger Millennials (16 percent) and households with lower-than-average income (16 percent) than for other groups.

“Saving for retirement needs to be made a bigger priority for the millions of Americans that aren’t saving, got started late, or are behind on their retirement savings,” McBride says.

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5 Fast Financial Stress Statistics

by LizStevens | Jun 3, 2019 | Blog

5 fast financial stress statistics. Americans opened up about debt, housing and spending habits in a survey from Freedom Debt Relief and the results underscore a desperate need for financial wellness.

More than 20 percent of Americans would rather go to the dentist or the DMV than talk about their finances, according to research by Freedom Debt Relief, which got people to open up about debt, housing and financial habits in their latest survey.

Nearly 80 percent of Americans said they have debt. More than 45 percent of them have debt over $10,000 and 5 percent of them are more than $250,000 in debt.

When asked about their financial habits, these are the five statistics that best highlight mounting financial stress for Americans:

5 Fast Financial Stress Statistics

41% don’t set aside any money for their household retirement plan.
25% have charged their credit card for groceries/food and not been able to pay it off right away.
33% said it would take more than 3 years to pay their credit card debt.
29% said if they needed $2,000 for an emergency, they would use a credit card.
20% of those with children in childcare said the cost is as expensive as, or more expensive than, their monthly rent or mortgage payment.

How Debt Impacts Personal and Professional Life

Most Americans carrying debt are suffering in silence. More than 40 percent of Americans said they find it difficult to talk about debt with friends and families, and as we mentioned earlier more than 20 percent would prefer a date with the dentist or the DMV over a discussion about debts and finances.

Americans bring their financial stress with them to work. Nearly 20 percent say the amount of their debt impacts their productivity. Research by PwC found more than 40 percent of employees who are distracted by financial stress spend 3 hours or more at work thinking about or dealing with issues related to their personal finances each week.

Financial wellness programs, like Best Money Moves, give employees an opportunity to privately learn how to better manage their debt, spending and saving. It empowers employees to resolve their financial stress, without having to talk about it.

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Retirement Concerns: Is Financial Literacy the Solution?

by LizStevens | Apr 17, 2019 | Blog

Retirement concerns: is financial literacy the solution? Those workers that do have a 401k aren’t saving enough to cover expenses in retirement, even when employers match contributions.

Retirement is a far-off goal most Americans don’t even think about while they’re paying down debts, struggling to pay for childcare and taking care of aging parents. It’s become so disconnected from reality that 20 percent of Americans are actually basing their retirement plans on winning the lottery, according to research by Stash.

Americans Are Not Saving Enough for Retirement

Not saving enough for retirement is the number one fear among middle-income earners, and with good reason. Four researchers at Kellogg School of Management at Northwestern University recently found three-fourths of American workers with defined contribution plans like 401(k)s aren’t saving enough to maintain their standard of living later in life.

Can Financial Literacy Solve Retirement Concerns?

Nearly half of U.S. adults failed to correctly answer basic financial literacy questions in a recent annual assessment.

The P-Fin Index by the TIAA Institute asks 28 questions across eight functional areas of finance including: earning, consuming, saving, investing, borrowing/managing debt, insuring, comprehending risk and go-to information sources. American adults scored highest in the area of borrowing/managing debt and lowest in comprehending risk.

This year, the P-Fin Index included several new questions indicative of financial wellness. According to the report by TIAA Institute, “Greater financial literacy is positively associated with the capacity to handle a financial shock, saving for retirement on a regular basis, being unconstrained by debt and other indicators of financial well-being.”

Financial Wellness Programs and Financial Literacy

Financial literacy is indicative of financial wellness and high school curriculums across the country are adding personal finance courses as a requirement for high school graduation to start addressing the widespread lack of financial literacy.

What about the half of U.S. adults who couldn’t answer basic financial literacy questions? How can they learn the skills they need when they don’t know where to begin?

Financial wellness programs help workers improve financial literacy, pay down debt and save for retirement. They are a valuable employee benefit and with the right financial wellness program, like Best Money Moves, employees are given the tools and resources to help them attain financial literacy while they better their financial wellness.

More on Retirement:

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How Bad Is the Student Loan Crisis?

by LizStevens | Mar 5, 2019 | Blog

How bad is the student loan crisis? Student loan assistance is becoming a popular employee benefit for employers who want to help workers reduce financial stress from student loan debt.

Over 70 percent of Millennials say they’ve delayed decisions like buying a home or having children because of their student loan debt, according to a recent survey by Bankrate.

“There’s a huge toll being taken on individuals and the U.S. economy from the growing burden of student loan debt,” said Bankrate’s Senior Economic Analyst Mark Hamrick. “For the huge slice of the American population with debt, it is necessary to juggle competing goals including saving for emergencies and retirement as well as major life decisions.”

Student Loan Debt Regret

Nearly 80 percent of Millennials would have approached their college finances differently in hindsight. More than half of Millennials would have applied for more scholarships than they did. Others would have attended a cheaper university, opted for community college or trade school, or majored in a different field.

“Many families are now striking out to investigate college campuses as they begin studies this fall,” said Hamrick. “For those prospective students and their families, many of who will help them to pay for their secondary education, we’d urge them to investigate all possible options for financial aid including scholarships to limit their borrowing.” He goes on to suggest: “Their options also include attending a lower-cost school such as those in-state as well as more economical trade schools and community colleges.”

Families can help children approaching college make better decisions about student loans now, but what about the Americans splitting the $1.5 trillion in student loan debt the U.S. has already generated who aren’t meeting milestones or saving for retirement?

Employee Student Loan Assistance

Employers are coming up with solutions to help employees pay down student loan debt and get back on track with saving for retirement. Some companies are allowing workers to transfer up to five days of paid time off for payments against student loan debt. Other programs offer student loan refinancing or allow employers to match employee 401(k) contributions with student loan repayments.

Lawmakers are working to expand existing legislation that allows companies to offer up to $5,250 in tax-free tuition reimbursements to include $5,250 in tax-free student debt relief for workers in an attempt to further motivate employers to offer student loan assistance benefits.

Student loan debt assistance is still a new benefits offering, but it’s developing rapidly to meet the need to address the $1.5 trillion issue that’s stressing Americans out and keeping them from financial security.