More Than Half of Employees Stress Out Over Finances

Fifty-six percent of employees are stressed out over their financial situation, Bank of America Merrill Lynch found in a survey. This is causing people to spend a median of two hours a week, or 100 hours a year, parsing over their finances while at work. Millennials spend an average of four hours a week on their personal finances; Gen X, two hours; and Baby Boomers one hour.

Among the 56% who say they are financially stressed, 53% of them say it is interfering with their ability to perform their job. Bank of America Merrill Lynch believes the solution to this is for employers to offer formal financial wellness programs, so that their employees can get their financial houses in order.

“Stress over personal finances extends into the workplace, impacting employees’ productivity, health and overall well-being,” says Lorna Sabbia, head of retirement and personal wealth solutions at Bank of America Merrill Lynch. “This confirms our dedication to working with employers to help employees navigate financial concerns and improve their financial wellness.”

One dichotomy that the survey found is that, while many employees are financially stressed, 87% are optimistic about their financial future. The top three reasons for this optimism are living within their means (51%), being in good health (49%) and having a well-paying job (45%).

However, even optimistic employees have concerns, particularly women. Among all employees, the top concern is running out of money in retirement, cited by 64%. The next concern is having to work longer than they had hoped for, cited by 61% of women and 51% of men. That is followed by not being able to work due to a serious illness (58% of women and 52% of men), not being able to pay for a child’s education (57% of women and 52% of men) and losing their job (45% of women and 46% of men).

NEXT: Life events

The 1,200 people who were polled said that certain life events impacted their finances, most notably buying a home (22%), losing a job (18%) and dealing with a serious illness (9%). When asked how they would deal with these challenges, more than half said they would have saved more money. Bank of America Merrill Lynch, in its “2017 Workplace Benefits Report,” says that “taking the time to educate employees about the potential impact of major life events can help them better prepare and estimate the financial impact of future events and potentially minimize the impact on other aspects of their lives.”

Another source of financial stress for employees is managing health care costs. Seventy-nine percent of employees said they dealt with rising health care costs in 2016, up from 69% in 2015. These significant costs are causing 72% of women and 59% of men to spend less on recreation or entertainment, and 63% of women and 62% of men to curtail their retirement savings. 

“Managing health care costs and retirement savings go hand in hand and can exert significant influence on each other,” Bank of America Merrill Lynch says. “As employees start to save less for their future needs to cover their health care costs today, their ability to fund the future and retirement they envision is placed at risk.”

NEXT: Looking to their employersThe survey definitively found that employees want and expect their employers to help them manage their finances, with 50% ranking retirement savings as the top priority. Other concerns vary by age, with Millennials and Gen X also being interested in good general savings habits and paying down debt. Baby Boomers are also interested in planning for health care costs and paying down debt.

Forty percent of employees of all ages would like their employer to bring in financial professionals to provide education. An even greater percentage, 86%, said they would participate in a financial education program if their employer made it available.

“Employers can be a powerful resource in helping employees pursue their financial goals beyond retirement and reduce the financial stress they are feeling,” Bank of America Merrill Lynch says in its report. “Making slight changes to retirement plan design and offering access to an action plan can help employers establish a culture of financial wellness that can help reduce employee stress, help employees save more for retirement and help put them on a path towards retirement success.”

The Bank of America Merrill Lynch 2017 Workplace Benefits Report can be downloaded here.