Amid ongoing inflation tensions and concerns over economic volatility, employee financial wellness is increasingly driving benefits conversations—and new stats highlight just how important such a focus is, for employees across demographics.
PwC’s newly released Employee Financial Wellness Survey paints a bleak picture for the state of employees’ finances: Nearly 60% of employees surveyed said their finances are their top life stressor, affecting everything from mental and physical health to performance and attendance at work. Nearly half can’t meet their household expenses, and about a quarter are living paycheck to paycheck.
It’s a landscape that makes long-term financial stability—traditionally viewed through the lens of retirement savings—look like a pipe dream to many.
Gen X employees—now in their mid-40s to early 60s—should be in their “peak savings years” as they head toward retirement, note PwC researchers. But most are far from that position.
Only 38% of Gen Xers say they’re likely to retire when they previously planned, with nearly half reporting they have to delay retirement because their retirement savings isn’t where they need it to be.
Two-thirds have less than $100,000 in the bank for retirement, and their prospects for savings will likely diminish as more than half say they’re likely to have to borrow from their retirement to meet rising short-term costs.
“When employees dip into retirement funds early or delay retirement altogether,” researchers note, “it affects more than personal finances and retirement plan leakage. It may also influence workforce planning, healthcare costs, succession timing and overall organizational stability.”
It’s not that employees aren’t motivated to save more, researchers caution—rather, they lack the confidence in their ability to do so and the know-how to balance their short- and long-term financial goals, and they’re feeling overwhelmed by the prospects. These gaps are where employer-sponsored financial wellness programs can be critical, they say.
“Employees define financial wellness simply: less stress, fewer surprises and the freedom to make financial choices with confidence,” researchers write. “For employers, that’s the opportunity.”
In particular, financial wellness programs that can boost retirement confidence—even in an environment like today’s—share several key tenets. They:
- tackle the stigma that can make asking for financial guidance more out of reach for already stressed employees;
- offer financial coaching in a way that meets employees where they are;
- help employees build practical money-management skills; and
- build a foundation—such as through emergency savings and debt management—that enables employees to get their day-to-day financial stressors under control in order to fuel longer-term independence.
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