Financial Wellness Gap Between Men, Women Continues to Widen

Despite struggling with debt and a higher cost of living, the number of employees feeling financially well in 2024 is trending up, according to Bank of America Institute’s 14th annual Workplace Benefits Report, “The Resurging Workforce.” 

This year’s survey revealed that 47% of employees rated their financial wellness as “good” or “excellent,” as opposed to 42% last year. However, women expressed significantly lower financial wellness scores than men, signaling that employers need to do more to address the issue of pay equity, among other challenges. 

More than half (53%) of men reported good financial wellness, compared to 36% of women. As women in the U.S. working full-time still earn 84 cents for every dollar men earn, according to the Census Bureau, the issue of lower pay may be contributing to women’s low levels of financial confidence. 

However, the survey found that only 44% of employers currently address pay equity, and 28% are considering it in the next one to two years. The majority of employers (78%) with pay equity initiatives said they have seen an improvement in the ability to attract top talent. 

In addition, Bank of America reported that as of 2024, 52% of the workforce identify as caregivers, and BofA speculated that segment is potentially is even larger, as many employees do not feel comfortable self-identifying in a caregiving role. As more than 75% of caregivers are women, it is also notable that caregivers reported a lower financial wellness rating than non-caregivers. 

The report pointed out that there is often a disconnect between employers who say they offer caregiving benefits and employees’ awareness of them. For example, 81% of employers said they offer support to caregivers, but 61% of employees said they are not aware of this caregiving support. This indicates that many caregivers are not accessing the support that is available to them and that employers should enhance communications to encourage workers to take advantage of these benefits, such as leave of absence of sick days to give care to family members or employee assistance programs such as counseling or support groups. 

Job Turnover Trends 

Another key trend identified in the report was that, compared to last year, more employees said they switched jobs or considered doing so in the past year, while 27% are considering changing jobs in the next year. Notably, younger employees and women were more likely to want to make the switch.  

This year, top reasons why employees reported that they would consider leaving their jobs included compensation, followed by career growth, overall burnout and work/life balance. This differs from last year when burnout was cited as the number one reason why employees would consider leaving their jobs. 

More women than men also reported the ability to work remotely as a significant factor when considering leaving a company. 

Retirement Confidence 

At the same time, employees’ overall outlook for the future continues to improve, as more expressed optimism when looking ahead to the next two to three years. When setting financial savings goals, saving for retirement was at the top of the list, followed by paying off credit card debt, saving for unexpected expenses and paying off mortgages.  

Around two-thirds of employees said they are confident their 401(k) will build enough savings to allow them to live the retirement they envision, with men and members of older generations more confident than other employee segments. For instance, 70% of men said they are confident about their income in retirement, compared to 58% of women. 

Meanwhile, responses revealed a lack of understanding around how Social Security, Medicare and Health Savings Accounts could help supplement 401(k) savings in retirement. More employees lacked understanding of Social Security this year compared to employees in 2023, but many understood that Social Security cannot be their only source of income in retirement, with most employees expecting it to replace 40% or less of their pre-retirement earnings.  

In the last six to twelve months, the majority of employees reported not having taken any action regarding their savings for health care in retirement. But for those who did take action, more employees increased their retirement savings than decreased their savings.  

Bank of America recommended that employers help their employees understand not only how much they will need in retirement, but also where that income will come from. Providing access to retirement planning education, as well as personalized Social Security, Medicare and health care savings education by life stage, are also important for employers to keep in mind.  

In partnership with Escalent, Bank of America surveyed a national sample of 955 employees who are working full-time and participate in 401(k) plans, and 804 employers who offer both a 401(k) plan and have sole or shared responsibility for decisions made in the plan.