Examining the Root Causes of Financial Stress

Marsha Whitehead, OneAmerica vice president of enterprise marketing, explains how evaluating top financial concerns provides great insight into the root causes of financial stress.

In addition to evaluating participant financial stress levels, a new OneAmerica survey also looks at the specific factors causing participants to experience financial stress.

Two in three retirement plan participants indicate they have moderate to very high levels of financial stress, according to recent client polling conducted by OneAmerica.

The firm finds one in five Americans report feeling “high” to “very high” financial stress levels.

“Not having enough for retirement was the top financial concern, cited by 34% of participants; not having enough to pay monthly bills was cited by 23% of participants, and not being able to pay housing costs was cited by 15% of participants,” the survey report says. “The study found that age impacts participant top financial concerns, with younger individuals showing more concern about meeting day-to-day expenses, and older individuals indicating they are more concerned about not having enough for retirement.”

Marsha Whitehead, OneAmerica vice president of enterprise marketing, notes that evaluating top financial concerns provides great insight into the root cause of financial stress.

“It is critically important for plan sponsors to understand and address participants’ concerns around retirement preparation and day-to-day financial needs,” Whitehead suggests. “Failing to do so might not only lead to a financially stressed work force, but one that may experience increased absenteeism, tardiness, decreased productivity and safety issues.”

OneAmerica’s survey shows one in three participants report that being able to meet day-to-day and monthly expenses most closely aligns with their definition of being financially well. One in four define financial wellness as having enough money to retire, followed by being prepared for a financial emergency or life event (15%), having a controlled level of debt (14%) and achieving a desirable level of income (12%), says the firm.

According to the polling, nearly one in four participants indicate that gaining control of their debt is most important when it comes to feeling financially well, followed by 22% indicating that contributing more to their retirement plan will help them in achieving financial wellness. Creating a formal budget or spending plan was cited by 19% of retirement plan participants.

“As the industry looks to place a value on a participant’s or a plan’s financial wellness, it is important to look at these results and understand that achieving financial wellness varies from participant to participant and can shift as an individual ages,” observes Melissa Musial, OneAmerica marketing research and data manager. “Although we see retirement preparation as a top financial concern and near the top of how participants define and achieve wellness, basic financial concerns such as meeting day-to-day expenses often take priority. If a plan sponsor has not yet implemented a financial wellness program, now is the time.”

A white paper with additional survey results is available for download here.