The good news is that more Boomers used a financial calculator to run a retirement projection last year than the year before. On the other hand…
A new report by Financial Finesse notes that 50% of Boomers did a retirement projection in 2015, up (slightly) from 47% in 2014. Unfortunately, this resulted in the biggest increase among the generations in the percentage that now realize they are not on track for retirement, up to 20% from 17% in 2014. While the percentage that are confident in their investment strategy held steady at 51%, the percentage that claim to have a general knowledge of investing slipped from 81% to 78%.
Boomers also saw in increase in contributing to tax-advantaged education accounts (20% to 25%) and knowing they were on track to save for college costs (38% to 45%).
Debt ‘Lode’
The report notes that one reason Boomers may be struggling to get on track for retirement is debt — 42% of financially distressed Boomers do not have a plan to pay off debt, up from 36% in 2014. And as if that were not enough, the stock market may have rattled the nerves of these pre-retirees as well.
The report notes that many employees first interact with workplace financial wellness programs in hopes of getting a handle on their debt. It found that among financially distressed employees who took a Financial Wellness Assessment in 2015:
- 65% feel overwhelmed by their debt, largely unchanged from 64% in 2014; and
- 48% do not have a plan for paying off their debt, up from 45% in 2014.
According to the report, women were far more likely (67%) to say they were overwhelmed by debt than men (58%), and African American and Hispanic employees were most likely to respond that their debt was overwhelming.
Stress Levels
In 2015, 85% of employees that completed a financial wellness assessment reported at least some level of financial stress, slightly less than in 2014. This is consistent with a survey released by the American Psychological Association in February 2015 which found that 72% of adults surveyed reported feeling stress about money at least some of the time.
Employees’ overall financial stress remained relatively unchanged from 2014, with 25% of employees who took a financial wellness assessment in 2015 indicating “high” or “overwhelming” levels of financial stress.
