In a recent survey, many workers report that their financial wellbeing has improved in the past year—but also say that the pandemic has taken its toll and they want support from their employers.
John Hancock Retirement’s eighth annual survey of its retirement plan participants found that participants’ confidence in their personal financial situation is at its highest level since 2018. Participants are also feeling better about their retirement savings than before the pandemic.
However, even though the survey found reduced levels of worry compared with last year’s report, financial stress continues to be prevalent, with 66% saying they worry about personal finances while on the clock, with nearly half responding that they worry about it on a weekly basis. As such, they want help in making money management decisions and are showing a desire for guidance and solutions as “pandemic fatigue” has evolved into “decision-making fatigue,” the firm says in its Stress, Finances and Well-Being report.
According to the report, this represents a chance for employers, financial professionals and retirement providers to help retirement savers build a solid foundation for the future. “Uncertain economic times often cause people to adopt positive financial behaviors in the short term,” notes Sue Reibel, CEO of John Hancock Retirement. “This fact, combined with the unique situation of COVID-19 greatly reducing the opportunities to spend money, found many retirement savers in a stronger financial situation than they were pre-pandemic.”
Reibel suggests there’s a “clear opportunity” for employers to keep this momentum going by offering support to their employees. In fact, the opportunity for employers to help their workforce is a potential mitigating factor for the Great Resignation and a means to improve recruitment and retention, the report suggests. To that end, 89% of participants said it’s important for employers to offer financial wellness programs, and 66% said having access to financial wellness programs would make them more likely to stay with their employer.
The value in employer-sponsored retirement plans is also broadly acknowledged, with almost all respondents stating that it’s a critical benefit, including 72% who said it’s “very critical.” What’s more, 80% of respondents said they wouldn’t be likely to work for a company that doesn’t offer a retirement plan.
Beyond those benefits, the report found that roughly two-thirds of respondents expressed at least moderate interest in receiving recommendations on Social Security strategies and retirement income forecasts from their employers. And 93% said receiving projections on their estimated retirement income and expenses would help them save more.
Additional key findings show that retirement planning (cited by 47%), paying off debt (43%), and ensuring that savings are invested wisely (37%) were the top priorities for participants in the coming months. When it comes to retirement expenses, employees are most worried about the cost of health care, with 68% indicating that it’s at least somewhat concerning.
And with only 37% of respondents saying they have a comprehensive financial plan for retirement, the potential impact of offering financial guidance and wellness programs is clear, the firm emphasizes.
“The takeaway of this year’s report is the paradox that we have actually seen improved savings and confidence in personal financial situations in an ongoing pandemic. However, the positive behaviors resulting in this trend have not been fully adopted by participants,” explains Lynda Abend, head of strategy and transformation at John Hancock Retirement. “This environment presents a unique opportunity to help people bridge their short-term improvements into actions that will bring them sustainable, long-term financial health,” Abend says.