Today’s workers are stressed, and one of the reasons is rising levels of financial stress. The majority of retirement plan participants polled have felt moderate to severe financial stress over the last six months, according to a survey by New York Life Retirement Plan Services. And, the survey found, women feel less prepared overall than their male counterparts for retirement and report higher amounts of stress as a result.

Nearly three-quarters of those surveyed (73%) reported feeling extreme or moderate financial stress over the last six months, according to New York Life’s “2014 Financial Stress and Retirement Readiness Report.” Two-thirds of survey respondents (60%) said they were behind or far behind schedule in saving for retirement. Women reported both higher levels of extreme stress and higher amounts of unpreparedness than men.

Issues triggering financial stress include keeping a job or searching for one; worries over being able to afford health care in retirement; and the perception that Social Security and Medicare will not be available by the time respondents retire. In fact, two-thirds or more of respondents believe Social Security and Medicare will not be available when they need it.

The ripple effects of financial stress can have an adverse impact on individual health, productivity, and quality of life.

The World Health Organization estimates the cost of stress to U.S. businesses at $300 billion annually, New York Life says in its report. Productivity losses that stem from personal and family health problems cost U.S. employers $1,685 per employee per year, or $225.8 billion annually, according to data from the Centers for Disease Control. One in four workers reports that financial stress distracts them at work, according to research on employee wellness by PwC.

Stressed workers can exhibit physical symptoms ranging from headache, muscle tension, chest pain and fatigue to upset stomach or sleeping problems. Stress can also have an impact on mood, causing anxiety, restlessness, lack of motivation or focus, irritability, sadness or depression. And stress can make it easier for people to engage in potentially destructive behaviors such as overeating or under-eating, angry outbursts, drug or alcohol abuse, tobacco use and social withdrawal.

The Value of a Plan

A majority of respondents (70%) said they see their stress levels staying the same or increasing in the next year. Most, however, also recognize the value of taking action and consider establishing a financial plan to be the most helpful thing they can do to reduce stress.

One way to effectively combat financial stress may just be to build a holistic financial plan, New York Life says. A holistic plan is one that would address basic financial skill sets, such as budgeting, saving, debt management, and retirement and investments.

The survey polled respondents on a variety of actions they could take to mitigate financial stress. About a third of participants (30%) said getting a financial plan and access to debt elimination or consolidation tools would be very helpful. Other strategies include relaxation techniques, such as meditation and deep breathing (rated very helpful by 19%), or stress-management coping skills (18%).

To successfully empower individuals to save for retirement, New York Life advises, plan participants need access to the tools and advice that will support the entirety of their financial lives. Plan sponsors can increase productivity and lower the health care costs associated with financial stress, but financial stress itself must be reduced.

Many respondents also reported that they would feel more secure if employers automatically increased contributions to their retirement plans, and if products such as retirement savings projections and retirement budgeting tools were provided.

Retirement plan providers need to recognize that saving for retirement is only one of many financial stressors that affect Americans today, points out Patrick Murphy, CEO of New York Life Retirement Plan Services. “We need to help plan participants manage a lot more than their 401(k) plan,” he says. “Ultimately, helping employees reduce financial stress will create happier and more productive workers for our clients.”

The “Financial Stress and Retirement Readiness Survey” was conducted online in April and May by Greenwald & Associates on behalf of New York Life. More than 1,500 plan participants on New York Life’s platform were surveyed. For a summary of the report can be accessed through New York Life’s website.