The majority of American workers (44%) said they feel either completely or somewhat insecure about their financial well being in today’s economy. Additionally, 30% said they feel either very or somewhat secure about their financial situation, while 26% said they feel neither secure nor insecure, according to the latest reading of the Principal Financial Well-Being Index.
Further, the number of American workers cutting back on their spending due to this insecurity is increasing. Twice as many American workers said they decreased their spending than those who indicated they have increased spending (37% versus 16%) during the same period. Overall though, the largest proportion (47%) indicates their spending is about the same.
Even if spending has been cut back, thankfully savings rates have not. Of those participants with retirement savings, 73% have not made any changes in how their retirement savings are invested while 19% moved to more stable investments and only 8% moved to more volatile investments.
Yet, workers were much more optimistic about the rest of the year, with nearly half (48%) of respondents saying they were very or somewhat optimistic about their financial outlook. This compares to 27% who say their outlook was very or somewhat pessimistic, and another 25% who said they had a neutral financial outlook. As correlated with their income level, those employees with less than $35,000 in household income were significantly less likely (26%) to say they were optimistic about their outlook, than were those with household income levels over $35,000 (46% versus 64%).
Polling employees about their benefit offerings, the Principal index found health insurance was the top offering, rated by 92% of employees has the top benefits, followed by defined contribution plans (74%). However, what is decreasing is the benefit employees wish for the most, a defined benefit plan. Slightly fewer workers said their employers were offering defined benefit plans this year over 2002 as this offering has declined 8%. Yet when asked what employee benefits American workers wished their company would add, 22% cited defined benefit pension plans, up 4% from 2003.
American workers are not taking their benefit plans for granted. The majority of respondents (71%) stated that having a good employee benefits plan encourages them to work harder and perform better. This sentiment has steadily increased year-over-year since 2001 (59%), with a seven percent increase since 2003 (64%).