Data and Research January 21, 2016

Majority of Workers Feel Burdened by Financial Stress

Money-related stress affects employee productivity, a survey finds.
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The majority of employees feel burdened by money-related stress, with 68% of respondents to Francis Investment Counsel’s 2015 retirement plan participant survey daily experiencing some level of financial stress.

Thirty-eight percent say money worries keep them awake at night at least occasionally.

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The survey finds money stress further affects employees because of its persistence; 23% of respondents think about their money stress often, if not constantly. This preoccupation also has an impact on employees’  job performance, with more than half of respondents reporting financial stress is a distraction at work.

“Employees often look to their employer as a resource they can trust, which makes corporate financial wellness programs a natural extension of workplace offerings,” says Kelli Send, senior vice president of participant services at Francis Investment Counsel. “When employers offer these programs, employees receive the help they need to perform better on the job and feel more confident about their financial futures.”

A survey recently released by Aon Hewitt found a majority of large employers (55%) now offer help to workers in a least one category of financial wellness, such as budgeting, debt management or the financial aspects of health care. By the end of the new year, more than three in four (77%) large employers will have at least one financial wellness program in place.

Data and Research January 21, 2016

Advisers Boost Retirement Preparedness

Seventy percent of those working with an adviser are on track or even ahead.
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People who work with an adviser are twice as likely to be on track for retirement, John Hancock Retirement Plan Services found in its 2015 Financial Stress Survey. Among those who work with an adviser, 70% are on track or are even ahead in saving for retirement, compared to 33% of those who are not working with an adviser.

Among those who are working with an adviser, more than one third have determined how much to save for retirement and half had contributed to an individual retirement account (IRA). Among those who are not working with an adviser, only 14% had calculated how much to save for retirement and only 16% contributed to an IRA.

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The survey also found that 58% of people with an adviser have money saved for an emergency, compared to 26% of those not working with a professional. Within a 401(k) plan, 28% of those surveyed with an adviser are contributing the maximum amount allowed, versus 13% of those not working with an adviser.

“People need advice, not just investment advice but also basic retirement planning guidance,” says Patrick Murphy, president of John Hancock Retirement Plan Services. “And people need help with more holistic financial issues such as budgeting and meeting short-term needs versus the need to save for longer-term goals. It’s very clear that engaging a financial adviser helps people take positive financial steps, from saving for emergencies to saving for retirement.”

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