Student loan debt, mortgages and health care costs are the biggest financial stressors for workers, according to the State Street Global Advisors (SSgA) retirement survey, which finds no age group is immune to financial stress.
In addition, many employees expressed an unsettled feeling of not having done enough to prepare for retirement.
It’s common knowledge that financial concerns are usually top of mind for individuals and families, says Fredrik Axsater, global head of defined contribution at SSgA, but the survey’s findings demonstrate the level of concern individuals have about finances.
“Financial and workplace stressors have the greatest impact on work quality and productivity, which confirms what we are hearing from employers—we need to address workplace financial demands beyond retirement savings,” Axsater maintains. “A more holistic approach is needed, providing tools and opportunities for employees to reduce stress and improve their financial well-being.”
At risk, Axsater says, is workplace productivity, which suffers when employees are financially troubled. The survey underscores the importance of financial wellness, which is now part of nearly all conversations with employers. When employees have the resources and tools to help them improve their financial lives and alleviate daily financial stress, he points out, plan sponsors are then able to refocus their employees’ attention to retirement savings. “A holistic approach creates the opportunity to address roadblocks to retirement readiness while increasing engagement around financial well-being,” Axsater says.
Overall financial well-being is a challenge, the survey found, with a significant number of survey participants pointing to rips in their safety nets. More than half were confident they could pay for a financial emergency that required up to $1,000. But just fewer than half acknowledged living paycheck to paycheck—implying that a large financial setback would have a serious impact.
For most, the heaviest debt burdens are mortgages, car loans and credit cards. Debt patterns shift through life phases from auto/student loans to credit cards to a mortgage. For most, loans for their children’s education are among the last loan challenges.
Most respondents cited high cost and lack of convenience as the top the reasons for not engaging in a financial wellness program.
Survey findings included:
- Nearly 60% of employees are emotionally stressed and distracted by their financial situations;
- Nearly 50% live paycheck to paycheck;
- 37% acknowledged financial stress has caused their productivity at work to suffer; and
- 25% have missed work because of stress from a personal financial situation.
SSgA, the investment management business of State Street Corporation, surveyed approximately 1,000 employees between the ages of 20 and 69 for its semi-annual employee retirement survey, conducted online by TRC Market Research from January 7 to January 11. The median age of respondents was 45; 48% were male and 52% were female; and 90% of respondents were employed full time.
More insights about the survey are available on State Street Global Advisors’ website.