Workers are slightly feeling better about their financial health, thanks to advancements offered by their employers, finds new research out today by Charles Schwab.
Schwab’s 2024 401(k) Participant Study, which surveyed 1,000 U.S. 401(k) plan participants, reports that 64% of workers say their employers have helped them manage financial stress compared to 52% last year. Employees say plan sponsors have increased their pay (39%), offered flexible work arrangements (19%), increased their 401(k) match (18%), provided access to financial wellness and educational resources (15%), and provided an additional bonus (14%).
Slightly more workers (24%) feel confident about the state of their finances this year compared to last year (20%), yet other continue to feel stressed. Half of workers surveyed say their financial situation has not changed, and one in five believe it has instead worsened. Younger employees were also more likely to say their financial situation has improved (Gen Z at 37% and Millennials at 35%), compared to Gen Xers (28%) and Baby Boomers (21%).
“While the markets have generally performed well this year, inflation and economic conditions have continued to put pressure on workers’ finances at elevated levels,” said Lee McAdoo, Managing Director of Schwab Retirement Plan Services, in a statement. “In the face of external economic factors, employers are supporting their employees with a combination of direct financial assistance and accompanying resources to help them manage financial stress and overall well-being.”
Flexible work arrangements were also particularly critical among participants, with 84% of respondents listing it as an “important” work benefit and 57% adding that they would forego a percentage of a salary increase for more autonomy over when and where they do their job, Charles Schwab found. Gen Zers (75%) and Millennials (71%) were most willing to make this swap.
Among areas for improvement, one in three workers said they want help in understanding how new regulatory and legislative changes, like SECURE 2.0, could affect their retirement plan. Specifically, workers would like to learn more about government matching contributions to individual retirement accounts (IRAs) or 401(k) accounts (53%); easier 401(k) withdrawals for emergency expenses; employer contributions as Roth; setting up emergency savings accounts at work (39%) and increasing contribution maximums for ages 60 to 63 (34%).
“As employers navigate changes they can make within their retirement plans, it’s important to evaluate which provisions could add the most value for their employees,” said Marci Stewart, director of Client Experience at Schwab Workplace Financial Services. “It’s still early days for SECURE 2.0 adoption as employers consider the potential it holds to build on the support they are offering employees across a range of financial needs.”