Benefits June 27, 2017

Employees Want Employer Help With Financial Issues

More than half indicate they wish their employer offered more resources to help them prioritize their finances and wish their employer did more to educate them about saving for retirement.
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Thirty-seven percent of Americans report feeling “not very” or “not at all” financially secure, while the majority (54%) describe themselves as “somewhat secure,” according to the MassMutual Middle America Financial Security Study.

Overall, 63% of respondents strongly or somewhat agree they are behind on preparing for retirement. More than half indicate they wish their employer offered more resources to help them prioritize their finances (52%) and wish their employer did more to educate them about saving for retirement (51%).

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Eight in 10 respondents earning less than $45,000 annually strongly or somewhat agreed they are behind on preparing for retirement compared with 54% of those earning $75,000 to $150,000 annually. In addition, 62% of those earning less than $45,000 annually want employer help prioritizing their finances, compared to 47% of those earning $75,000 to $150,000 annually.

Debt is the biggest single financial issue facing Middle America. Overall, 22% of respondents cited debt as their top financial problem with more Millennials and Generation Xers saying so, the study found. As middle Americans age, respondents reported, health care costs rise in importance, becoming the No. 1 concern for Baby Boomers.

“MassMutual’s study shows that employers may have opportunities to play a bigger role in helping their employees strengthen their finances, including deploying more educational resources on retirement savings and money management, benefits to help employees manage both short- and long-term financial challenges, and promoting the link between financial wellness and overall wellness,” says Teresa Hassara, leader of Workplace Solutions at MassMutual.

The internet-based research was conducted on behalf of MassMutual by Greenwald & Associates and polled 1,010 working Americans ages 25 to 65 who had annual household incomes of between $35,000 and $150,000 and participated in making household financial decisions. The study report can be found here.
Data and Research June 27, 2017

Younger Investors Show Good Savings Habits

However, many cite obstacles to saving for retirement.
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Investors younger than 30 are quite confident about retirement, with 85% saying they believe they will be able to have the kind of lifestyle they would like to have in their golden years, E*TRADE found in a survey.

Seventy-six percent think they will be able to retire by the age of 64. For 45%, retirement is the top priority for long-term saving, and 85% are saving more than 5% of their income in a retirement account.

However, it is not all clear sailing for these young people. Sixty-nine percent believe that housing costs are a barrier to saving for retirement. Sixty-six percent say the same thing about student loans, and 63% about other educational expenses. Fifty-four percent have dipped into their retirement account, and among this group, 74% regret having done so.

“It is great to see young investors focused on their retirement goals and beginning to save early, as the power of compounding returns is significant for this group,” says Mike Lowengart, vice president of investment strategy at E*TRADE Financial.

Lowengart offers advice on what young people should do to improve their situation, starting with planning on increasing contributions as they grow older and see their salary increase. Second, always save at least as much as the company match, as otherwise, this is free money left on the table. Thirdly, consider putting at least some money into a Roth 401(k) or individual retirement account (IRA). Fourth, Lowengart says, resist the temptation to time the market.

E*TRADE conducted the online survey of 164 young adults between the ages of 18 and 29 who manage at least $10,000 in an online brokerage account in early April.

 

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