Nearly two-thirds of all employees are not financially well, new research reveals.
This is a key finding of the “2013 Workplace Benefits Report,” which details employees’ views on achieving financial wellness. Published by Merrill Lynch, a New York-based unit of Bank of America, the report surveyed more than 1,000 employees who are 401(k) plan participants to learn how workplace benefits are helping them manage competing financial goals.
The report indicates that 65 percent of 401(k) plan participants are “not financially well.” The percentage is derived from a financial wellness score that consists of ratings from 0 points to 10 points based on employee answers to 10 components. Among them: the ability to maintain a good standard of living, save enough for retirement, and confidence in the ability to afford health care-related payments, considering an employer’s health plan.
The report adds that 90 percent of all surveyed participants “feel some degree of stress about their financial wellness,” even when participating in retirement and health care plans at work. Among those who are concerned about their financial wellness, the report discloses these findings:
85 percent of plan participants report they are not saving enough for retirement.
76 percent think that suffering a health-related financial crisis that resulted in three months without pay would be a problem. And 26 percent say it would represent a major crisis.
75 percent do not believe they are in control of their financial situation.
68 percent do not feel they can afford a good standard of living for their families.
63 percent do not feel secure with employment at their existing firms.
The report observes a less than perfect correlation between income and financial wellness levels.
“[T]hose with higher income levels and accumulated retirement assets, on average, have higher financial wellness scores,” the report states. “However, when we control for income level and assets, financial wellness scores vary widely.
“Put another way, having a high income does not guarantee financial wellness—and a relatively low income does not necessarily drop employees to lower financial wellness.”