When it comes to overall financial wellness, Americans feel challenged on numerous fronts.
But employer-provided information and financial-wellness programs go a long way in helping many employees keep their financial lives on track and feel more confident about their finances, according to the 2022 TIAA Financial Wellness Survey.
The study was conducted online from Oct. 22 to Nov. 3, surveying 3,008 Americans ages 18 and over on a broad range of financial-management issues and topics.
Six in 10 Americans reported that they are stressed about their finances, including a quarter with “a great deal” of stress. Seventy-five percent of Gen Z (along with 74% of millennials) report feeling financially stressed.
Just 22% of Americans rated their own financial wellness as high (a 9 or 10 out of 10), the survey said. Gen Z people have the least positive view; only 12% of Gen Z rate their financial wellness as a 9 or 10.
People in this generation also are more likely to say their financial wellness is worse than where they thought they’d be at their age 10 years ago and worse than people in their parents' generation when they were their age.
“There could be any number of reasons behind Gen Z’s view of their financial wellness,” explained Snezana Zlatar, senior managing director, financial wellness, advice & innovation, TIAA Financial Solutions. “But we know that targeted, ongoing education about the benefits these programs offer can help increase their adoption and drive financial wellness for employees.”
Key Concerns Of Americans
For most Americans, day-to-day financial concerns supersede longer-term issues, Zlatar said.
“Americans rank concerns such as 'having the means to take care of your family and others' (53%), 'not worrying about money or debts' (51%), 'feeling protected financially from life’s unexpected events' (51%), ahead of retirement financial security (36%) when asked to define financial wellness,” she said.
Fortunately, employer-sponsored, financial-wellness programs appear to help ease money concerns of Americans, in particular Gen Z, added Zlatar. But only about 55% of workers take advantage of these programs, she added.
Employees who have participated in a wellness program are twice as likely to have a high financial-wellness rating as those who haven’t participated (32% vs 15%), she said.
“They’re also more confident they can retire when they want (54% vs 32%); more confident they will be able to afford the retirement lifestyle they want (54% vs 29%) and are more confident they will not run out of money (50% vs 29%),” she added.
Among the financial-wellness resources at work, saving for retirement is the most used, followed by managing healthcare costs, help in building an emergency fund, and choosing/monitoring investments.
Employee Focus On Short-Term Issues
Because day-to-day financial concerns are paramount for so many Americans, longer-term issues are receiving less focus. According to the survey, Americans rank concerns such as "having the means to take care of your family and others" (53%), "not worrying about money or debts" (51%), and "feeling protected financially from life's unexpected events" (51%), well ahead of retirement financial security (36%) when asked for a definition of financial wellness.
They also rank the "ability to pay monthly bills without difficulty" (38%) and "having a reliable source of income" (38%) ahead of being on track with retirement savings (16%) when asked about their current priorities for securing financial wellness.
In addition, the survey found that most people don't think about their retirement planning when considering their financial wellness. This is especially true in the case of Gen Z. Still, 57% of people – and 68% of Gen Z – are interested in learning more about effective retirement planning, along with other key topics, through an employer financial-wellness program.
Employer Responsibility For Programs
Over half of survey respondents – and 65% of Gen Z respondents -- agreed that employers have a responsibility to help employees improve and maintain their financial wellness.
Even so, the survey noted, about three in four workers (and Gen Z in particular) have some reservations about using that support. The most common of these reservations are the possibility of hidden costs or fees and not wanting to disclose finances or financial issues to their employer.
Ayo Mseka has more than 30 years of experience reporting on the financial-services industry. She formerly served as Editor-In-Chief of NAIFA’s Advisor Today magazine. Contact her at [email protected]