401k participants are worried, and it’s affecting their job performance (and therefore company costs).
Two-thirds of retirement plan participants indicate they have moderate to very high levels of financial stress, with 20 percent reporting high to very high levels, a new survey from OneAmerica finds.
Unsurprisingly, not having enough for retirement was the top financial concern, cited by 34 percent of participants; not having enough to pay monthly bills was cited by 23 percent of participants, and not being able to pay housing costs was cited by 15 percent of participants.
The study found that age is a factor in participant concerns, with younger individuals showing more concern about meeting day-to-day expenses, and older individuals indicating they are more concerned about not having enough for retirement.
“Evaluating top financial concerns provides great insight into the root cause of financial stress,” Marsha Whitehead, OneAmerica’s vice president of enterprise marketing, said in a statement. “It is critically important for plan sponsors to understand and address participants’ concerns around retirement preparation and day-to-day financial needs. Failing to do so might not only lead to a financially stressed workforce, but one that may experience increased absenteeism, tardiness, decreased productivity, and safety issues.”
In looking at how participants define financial wellness, the company found that one-third of participants report that being able to meet day-to-day and monthly expenses most closely aligns with their definition of being financially well.
One-quarter of participants define financial wellness as having enough money to retire, followed by being prepared for a financial emergency or life event, having a controlled level of debt and achieving a desirable level of income.
The survey also asked participants which attributes were most important in helping them achieve financial wellness and found that 24 percent of participants indicate gaining control of their debt is most important, followed by 22 percent indicating that contributing more to their retirement plan will help them in achieving financial wellness.
The third most important attribute in achieving financial wellness was creating a budget or spending plan, which was cited by 19 percent of participants.