The Incredible Toll 401k Financial Stress Takes

401k, stress, retirement, saving

She's not happy with her financial situation.

Calling all financial wellness experts. Employees are stressed about their financial situation, and it’s affecting their job performance and, by extension, their employer’s bottom line.

Don’t take our word for it; it’s what they themselves are saying in a new survey, with 56 percent of employees saying they’re (really) worried about money.

Slightly less, 53 percent, say it interferes with their ability to focus and be productive at work, according to the latest “Bank of America Merrill Lynch Workplace Benefits Report.”

The study also found that “employers can play an important role in improving the financial lives of their employees.”

Of employees who participate in a retirement savings plan, a whopping 67 percent say their employer was influential in getting them to save for retirement.

“Stress over personal finances extends into the workplace, impacting employees’ productivity, health and overall well-being,” Lorna Sabbia, head of Retirement and Personal Wealth Solutions at Bank of America Merrill Lynch, said in a statement. “This confirms our dedication to working with employers to help employees navigate financial concerns and improve their wellness.”

The report explores attitudes of employees on key financial topics, the findings of which include:

While optimistic, employees still concerned about their financial futures

For the second year in a row, the majority of employees indicate that they are optimistic about their retirement future. Despite this sustained optimism, however, many employees still have concerns about their long-term security.

In particular, women surpass men with their worries about having to work longer than they had hoped (61 percent of women vs. 51 percent of men) and needing to support family members (46 percent of women vs. 38 percent of men).

The study finds that major life events can have a profound impact on employees’ financial situations, compounding the stress. Employees cite buying a home, losing a job and dealing with a serious illness among the life events that have the greatest impact on their finances. Further, the study reveals gaps in financial preparation for such events, including 29 percent of employees who were not prepared for the financial consequences and 47 percent who underestimated the financial impact.

Employees call on employers for help managing finances

The finds that employees look to their employers to help manage several aspects of their financial lives. Half of employees rank saving for retirement as the matter they need help with the most. The study also found that support from employers is paying off.

Health care costs remain among employees’ top financial concerns

In a nod to HSAs, rising health care costs continue to be a key source of stress for employees. A growing number of employees indicate they have experienced an increase in health care costs, which is up 10 percentage points since 2015 (79 percent in 2016 vs. 69 percent in 2015).

Among employees who have experienced increasing health care costs, 56 percent are contributing less to their financial goals as a result.

Amid growing concerns over health care costs, employees place great value on the health benefits provided by their employer. In fact, employees rank their health benefits as their top employer benefit (40 percent), followed by their 401k plan (31 percent).

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