Nearly nine in ten U.S. workers are optimistic about their financial future, according to a new report from Bank of America Merrill Lynch. Surveyed employees attributed their bright outlook to a variety of factors, including the improving economy and strong financial markets. However, the most frequently cited reasons for workers’ elevated financial optimism were more personal issues, such as living within their means, being in good health, and having a well-paying job.
Confident employees, though, are also aware that their financial situation can change, and many surveyed workers admitted that they still have money-related concerns. For example, nearly two-thirds (64 percent) of respondents said that they are worried about running out of money in retirement. Other frequently cited concerns included having to delay retirement, becoming seriously ill and not being able to work, the challenge of paying for their kids’ education, job security, having to support other family members, becoming a financial burden to their family, and being able to cover their mortgage or rent payments.
With so many issues on their minds, it should not be too surprising that employees will often spend time at work thinking about their personal financial matters. In fact, the surveyed employees, based on their responses, spend a median of two hours at work each week focused on their personal finances instead of their job responsibilities. That equates to roughly 100 hours, or two-and-a-half workweeks1, of lost productivity every year. More than half (53 percent) of the surveyed employees who said that they are stressed when it comes to their financial situation even admitted that the stress interferes with their ability to focus and be productive at work.
Younger employees were found to spend significantly more time at work each week worrying about their personal finances (double that of Gen-X and 4x's that of Baby Boomers), and Millennials were twice as likely as Baby Boomers to say that financial stress interferes with their work. Beyond just feeling stressed, financial concerns can have a real impact on employees' physical well-being as well. Nearly six in ten workers, for instance, said that their financial worries have negatively affected their health. That means that financial stress in the workplace can not only hurt employers through lost productivity but also through potentially higher health insurance costs.
Further, 56 percent of surveyed workers who reported experiencing an increase in their healthcare costs said that they are contributing less to their financial goals as a result. For roughly half of these respondents that means they are paying down less debt, and nearly two-thirds said that they are saving less for retirement as a result of higher healthcare outlays. Unsurprisingly, access to health insurance and a 401(k) plan were the employer-provided benefits that surveyed workers said they value the most. Employee respondents, though, also reported that they want employers to help with managing a range of financial matters.
The top issue that workers said they need assistance with is saving for retirement, and 67 percent of employees admitted that their employer has already been influential in getting them to set money aside for retirement. However, many employees also stated that they would like their employer to bring in financial professionals to the workplace to provide both general education and education tailored to their age and finances, as well as access to the creation of a personalized financial strategy. Eighty-six percent of surveyed workers even said that they would participate in any kind of financial education program if provided by their employer.
1. Assuming a full-time workweek equals 40 hours.