worried girl

Worries, Worries, Worries

An August article by ASPPA reported on a Financial Finesse report that indicated the level of financial stress last year ended up with almost 30% of employees who experienced crushing financial stress not contributing enough to their employer sponsored plan to enjoy the full company match. Worse, 4 out of 10 said they did not contribute at all.

60% of employees cited anxiety about reaching their financial goals as a main cause of stress. Merely 25% of employees indicating high or overwhelming financial stress have run a retirement projection and of those that have, only a third (high level) to a sixth (overwhelming) believe they are on track to reach their retirement income goals.

2015 saw a slight decrease in the percentage of employees with at least some level of financial stress taking a risk assessment and there was a 4 to 6 percentage point drop in the number of employees that reported rebalancing their investment accounts.

Only 15% of employees who took a financial wellness assessment reported no financial stress, up a little from 2014, with 25% reporting their financial stress as high or overwhelming. In 2009-2010, these numbers were considerably higher with 97% of employees feeling some level of stress and 30% reporting high to overwhelming stress.

ASPPA consolidates the data for 2015:

  • 60% reported some financial stress
  • 19% felt their financial stress was high
  • 7% reported financial stress as overwhelming
    • Only 6% of those employees with crushing financial stress have an emergency fund
    • Only 44% pay their bills on time (down 4% from 2014)
    • One-third have resorted to taking either a retirement plan loan or hardship withdrawal.
  • 11% reported no financial stress
    • Have never taken a retirement plan loan or hardship withdrawal
    • 94% live within their means
    • 98% consistently pay their bills on time
    • 80% keep an emergency fund
    • 93% are comfortable with their level of debt

The study also reports that women are more likely to report overwhelming financial stress. “Even combining age, the presence of minor children and income, gender played a major role in the level of stress reported by users. Mothers with minor children living in households with income below $60,000 (9% of the total sample) are the most financially stressed,” reported ASPPA. The Financial Finesse study also found:

  • 9% of women under 30 vs. 5% of men reported overwhelming financial stress
  • Men making under $60,000 annually were more likely than women to report no financial stress (13% vs. 9%)
  • Pre-retirees (age 55+) report financial stress levels lower than average
    • 23% indicate no financial stress
    • 28% are heading into retirement with uncomfortable levels of debt
    • 33% have no emergency funds
    • 50% express uncertainty about their retirement preparedness
  • Higher-income families also experience financial stress but are less likely to have high or overwhelming financial stress.
    • 77% of men and 83% of women earning $100,000 or more feel financial stress
    • Only 44% pay their bills on time (down 4% from 2014)
    • One-third have resorted to taking either a retirement plan loan or hardship withdrawal.

The Financial Finesse report also addresses the impact that financial stress has on productivity at work, as well as sleeplessness and marriage which, in turn, effect work productivity.

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