While fewer employees are stressed about finances in 2018 compared with the last few years, the number who are experiencing money woes—nearly half—is still striking. What’s worse, many are considering tapping into their 401k or other retirement savings in an attempt to get back on track.
In its 2018 Employee Financial Wellness Survey, PwC found 47 percent of all workers say they are stressed about finances. This is a slight improvement from 53 percent in 2017 and 52 percent in 2016.
Money woes are worse among younger generations compared to Baby Boomers, but appear to be improving somewhat, as well. Fifty-three percent of Millennials and 50 percent of Gen Xers are experiencing financial-related stress this year. In 2017, these figures were 57 percent and 59 percent respectively.
Although finances appear to be improving for some, employees aren’t overwhelmingly confident about their financial futures. Of those who aren’t even stressed about money, one-third think they will likely need to use funds they’ve saved in retirement accounts to pay for other expenses. Unsurprisingly, the figure is much higher for those who are financially stressed: 54 percent say they will likely draw from these funds for purposes other than retirement.
Finances are so problematic, in fact, that respondents across all generations cited money concerns as the top source of stress in their lives, far above job stress, health concerns and relationship issues.
Complicating matters, less than half of all employees have emergency savings. Just 40 percent of women and 54 percent of men say they would be able to cover basic expenses if they found themselves unemployed for an extended period of time.
“Retirement plan funds have become a safety valve for many who don’t have money set aside for an emergency or unexpected expense,” Kent E. Allison, Partner & National Leader, Employee Financial Education & Wellness for PwC, said in a statement.
“While some employers are looking to address this growing concern through plan design changes that further restrict loans and withdrawals, they may only exacerbate the situation if employees then seek less favorable ways to meet their needs.
“It is our continued belief that it will take a combination of strategic plan redesign, along with an increased focus on promoting healthier employee financial behaviors, to solve the issue,” he concluded.