Report: Employees need help with financial security

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Employees indicate that they are optimistic about their financial future, according to the Bank of America Merrill Lynch Workplace Benefits Report.

Despite sustained optimism, however, many employees still have concerns about their financial security. In particular, women surpass men with their worries about having to work longer than they had hoped (61 percent of women vs. 51 percent of men) and needing to support family members (46 percent of women vs. 38 percent of men).

Other key takeaways from the report include the following.

Many employees are unprepared for life events

The report finds that major life events can have a profound impact on employees’ financial situations, compounding the financial stress. Employees cite buying a home, losing a job and dealing with a serious illness among the life events that have the greatest impact on their finances.

Further, the study reveals gaps in financial preparation for such events, including 29 percent of employees who were not prepared for the financial consequences and 47 percent who underestimated the financial impact.

Employees are looking for financial support from employers

  • Half of employees say they would take a more active role in managing their finances if they had a regularly scheduled financial review (50 percent) or a personalized action plan (49 percent).
  • Eighty-six percent of employees would participate in a financial education program provided by their employer.
  • At least 40 percent of employees would like their employers to take a more active role in supporting their financial lives, such as bringing in financial professionals, offering education tailored to their age and finances, and providing access to a personalized financial plan.

Concerns over health care costs are increasing

Rising health care costs continue to be a key source of stress for employees. A growing number of employees indicate they have experienced an increase in health care costs, which is up 10 percentage points since 2015 (79 percent in 2016 vs. 69 percent in 2015). Among employees who have experienced increasing health care costs, 56 percent are contributing less to their financial goals as a result.

Amid growing concerns over health care costs, employees place great value on the health benefits provided by their employer. In fact, employees rank their health benefits as their top employer benefit (40 percent), followed by their 401(k) plan (31 percent).

Action plan for employers

Employees are looking to their employers as a resource in helping them manage a broad range of financial matters. Employers can best meet this call for help by offering programs that address a wide range of financial needs.

Employers can dramatically increase employee engagement and financial wellness by taking small steps. Slight changes to retirement plan design, establishing a financial wellness program with education and giving access to support from financial professionals can encourage employees to take a more active role in managing their finances.

More importantly, it can help employers establish a culture of financial wellness that can help reduce employee stress, help put their employees on a path towards retirement success and allow employees to focus and be more productive at work.

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