More workers are stressed over finances
By Dan Berman
The percentage of employees reporting financial stress rose in the third quarter, even as fewer reported ignorance about personal money matters and more said they were actively planning for retirement, according to research released Thursday by Financial Finesse.
As employees learn more about how much they need to save for college, retirement and other big-ticket items, they reported more unease about the future. For instance, while more respondents (56 percent) said they had a plan for paying off debt than did so in the same quarter in 2012 (45 percent), the percentage reporting high or overwhelming financial of stress rose from 13 percent a year ago to 19 percent in the third quarter.
More employees are contributing to workplace retirement plans, with the number jumping to 90 percent from 85 percent a year ago. The research found evidence that more workers are planning for retirement. The number who said they had used a retirement calculator was up 10 percentage points to 39 percent year over year.
As awareness of retirement needs has risen, so has the percentage that said they are on track to replace 80 percent of their income when they retire (19 percent now vs. 12 percent a year ago). Still, while fewer employees than a year ago said they did not know if their retirements saving would meet that goal, the number was still more than half (61 percent).
Those 45 and older expressed the most interest in monitoring the finances. Financial Finesse CEO Liz Davidson noted that about half (48 percent) of those who used a workplace financial wellness tool were in this category.
“This group is likely more concerned about their current state of wellness than younger employees due to the fact that they face more immediate challenges in achieving retirement security, caring for elderly parents, sending children to college during a time of significant tuition increases, and in particular, rising health care costs,” Davidson said in a statement.
A Financial Wellness Score, calculated by El Segundo, Calif., Financial Finesse as part of its research, fell below 5 for the first time in more than a year. This year’s score of 4.9 on a scale of 1 to 10 indicates that employees “demonstrate some financial skills but have significant gaps in their overall financial planning.” Over the last two years, the score has ranged from 4.5 to 5.4.
Financial Finesse provides counseling and education programs to more than 500 organizations with a total of more than 600,000 employees. Information for its research was gathered by analyzing use of its programs by participants and through tracking questions.
Originally published on BenefitsPro.com