Wellness & The Worksite

A New look At Financial Wellness

Employers offering holistic benefits can help employees improve and maintain their sense of stability

The TIAA 2022 Financial Wellness Survey reveals that consumers still feel challenged on multiple fronts. Excerpts are presented below, and the full report can be viewed here.

When it comes to overall financial wellness, many Americans still feel challenged on multiple fronts. And when defining financial wellness, many agree it means feeling comfortable with one’s financial situation. Americans define financial wellness as simply feeling comfortable with their financial situation. Over 50% believe wellness is defined as having the means to take care of family, not worrying about money or debt, and feeling protected financially from life’s unexpected events.

Even among those with high financial wellness scores, there are gaps in planning and emergency savings. Despite Americans generally rating their financial wellness positively, there are areas of concern:

1. Planning

  • While seven in 10 Americans have a budget, just a quarter follow a detailed budget.
  • 38% have a written financial plan and only 16% have plans created by a professional.
  • Just 28% currently work with a financial professional.
  • Even among those with “high financial wellness,” only 39% have a detailed budget, 35% have a written plan from an advisor, and half are working with a financial professional.

2. Emergency Savings

  • In total, a large majority (78%) say they have an emergency fund. But these funds appear inadequate, as less than half say they can cover six months of expenses should they lose their job or income source.
  • 20% of those with high financial wellness could not easily cover six months of expenses.

3. Stress

  • Six in 10 Americans report some or a great deal of stress when it comes to their finances.
  • Especially worrisome, is that budgeters are more likely to report financial stress (even though those with high financial wellness are more likely to budget).

The Role Of Employers

Over six in 10 think employers have a responsibility to ensure employees are mentally well and healthy. Just half say the same around financial wellness.Still, Employer financial wellness programs appear to help ease money concerns of Americans. Workers who have participated in a wellness program are twice as likely to have a high financial wellness rating than those who are not offered resources or who do not participate (32% vs. 15%)

  • 92% of those with high financial wellness scores report understanding their plan extremely or very well
  • 39% with low financial wellness scores report understanding their plan

People with higher financial wellness scores are willing to put more money towards retirement If given an additional $200 a month, non-retired Americans would put an average of 60% towards their retirement savings. This increases to 71% among those who rate their financial wellness higher (vs. 45% of those with low financial wellness) Those with higher financial wellness are also already more likely to have retirement savings and to be contributing to an employer retirement plan.

However, only about half of workers receive financial wellness resources from their employer 55% of workers report employer assistance on financial wellness as either a standalone resource or as part of a financial wellness program. 36% say they receive more than one financial wellness resource.

  • The most common area that workers say their employer offers assistance is saving for retirement, but even this is only reported by 31%.
  • 45% of workers say they receive wellness resources other than saving for retirement.

And even when offered, many resources appear underutilized Utilization and engagement with benefits could also be stronger. Usage of offered resources hovers around 50%, except for saving for retirement (65% of those offered, or 20% of all workers).

  • Other higher used resources include information on guaranteed income (56%), how to improve credit score (54%), and saving for education expenses (52%).
  • Investment help and debt/student debt help is used by about a third of those offered the assistance.

Through The Generations

Younger workers are more eager than other generations for financial wellness benefits; however, barriers persist Gen Z and Millennials ranked more likely to be interested in each type of wellness resource.

Top barriers to engaging with employer wellness programs include:

  • Concerns about hidden costs
  • Not wanting to disclose their finances
  • 40% of Gen Z do not want to disclose, which is DOUBLE that of other generations

2/3 of Gen Z believe employers have a responsibility to help improve or maintain their employees’ financial wellness.

There is a major shift underway in expectations of an employer’s responsibility for their employees’ wellness. Gen Z is leading the way. Younger Americans are more likely to believe that employers have a responsibility to help their employees be well mentally, physically, and financially.

  • In fact, two-thirds of Gen Z believe employers have a responsibility to help improve or maintain their employees’ financial wellness. These expectations of employers may be driven in part by need.
  • Gen Z is more likely to give themselves a lower financial wellness rating than other generations (Millennials, for example, rate similarly to Gen X).
  • Gen Z is also the most likely to think their financial wellness is worse than people in their parents’ generation when they were their age.

Yet Gen Z does not have a defeatist attitude. As mentioned earlier, they show the most interest and engagement in employer wellness resources. And this engagement can help. Gen Z workers who are participating in financial wellness
programs:

  • Have a high financial wellness score (25% vs. 3% of those not offered/not participating).
  • Are more likely to say their wellness is better than others in their generation.
  • Have more retirement confidence.
  • Are more likely to have taken action to improve their wellness on one or more issues, including retirement-related improvements