Even as plan sponsors expand their retirement offerings, a survey by financial wellness platform FinFit shows employees are not happy with the financial wellness benefits their employers provide.
The research reports 53% of employees say their employer has yet to offer financial wellness benefits or compensation in response to rising prices caused by inflation. This frustration during periods of high market volatility has trickled down to their own savings—44% of employees are unhappy with their current savings level compared to 33% who indicated the same in 2022, and 68% of survey respondents said they don’t have money set aside for emergencies or unexpected expenses.
In fact, the lack of financial wellness features, coupled with swinging markets, has postponed savings across the board. Thirty-six percent of employees say the impact of inflation has delayed their ability to build emergency savings, while 33% say it has made them shelve retirement savings for now.
The shortage of adequate retirement savings has caused some respondents to question their ability to retire one day. Overall, 62% of respondents are nervous that inflation will affect their retirement savings and/or timing to retire. Fifty-three percent of people with retirement savings say they aren’t sure whether their savings will be enough to retire on, while 38% are sure they aren’t making sufficient contributions to their retirement savings.
Others were forced to borrow from their retirement savings. Twenty-two percent said they took money from their retirement account, with 64% of those respondents explaining that it was the cheapest loan option for them.
Looking to the future, 61% are nervous that a coming recession could affect their retirement savings or timing to retire.
Financial wellbeing in the workplace
FinFit’s research underscores the relevancy behind appropriate, employer-sponsored financial wellness benefits, and which benefits employees are prioritizing.
According to the survey, 68% of all employees are interested in an employer-sponsored savings product, with 47% looking for a low-cost loan available through their workplace.
Over half (53%) of respondents want a feature that helps them save more money, 31% are looking for benefits that help them pay down existing or avoid high-cost debt, and 27% want access to a financial coach or counselor.
“We believe that holistic financial wellbeing programs—ones that support emergency savings, inclusive access to earned wages and affordable loans, as well as wrap-around financial resilience programs including coaching and education—will lead the efforts to close the benefits gap,” said FinFit in its report.
In addition to the above, FinFit finds employees and employers alike are showing interest in salary-linked loans and early wage access. “Employers are becoming more open to benefits that directly address financial issues like high-cost debt, variable cash flow, and lack of emergency savings,” FinFit added.
Additional findings from FinFit’s survey can be found here.
SEE ALSO:
- Plan Sponsors Are More Involved with Retirement Planning in 2023
- Financial Wellness Firms FinFit, Salary Finance Combine Under FinFit Brand
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.