The “Great Recession” that began in 2008 left its mark on many people, affecting home values, bank balances, retirement accounts, and more. It also affected people emotionally, with some 64% of workers reporting that money is a very or somewhat significant source of stress, according to the American Psychological Association (APA).
Significantly, money has been the top source of stress in the APA survey since 2007. While overall stress levels have declined, a significant number of workers say their stress have increased. Thirty-two percent of women and 25% of men report an increase in stress over the last year. The APA report goes on to outline some of the problems stress can cause, including sleeplessness, overeating/poor eating, loneliness/isolation, ignoring responsibilities, and irritation/anger.
A survey of employees conducted by financial advisory firm PwC identifies some of the causes of workers’ financial stress, including:
No funds for emergency expenses: 50%
Not being able to retire when I want: 42%
Not being able to meet monthly expenses: 21%
The Costs of Poor Financial Decisions
The costs of stress have been studied as well. The Consumer Financial Protection Bureau (CFPB) issued a report that noted that employees who reported high levels of stress cost $413 more each year than those who did not report stress. With that much to gain, businesses are increasingly taking action. According to risk management provider Aon, 93% of employers are very or moderately likely to focus on their employees’ financial wellness in 2015, extending beyond simple retirement savings. Topics for which employers already offer or plan to offer education include:
Basics of financial markets
Health care planning
Saving for life stages
Budgeting
Financial planning
Debt management
For employers, the financial benefits of promoting financial wellness are clear. According to the CFPB, plan sponsors realize other benefits, such as savings in health care costs and more productive, engaged employees. Plan sponsors who provide financial education see lower numbers of 401(k) loans, less wage garnishment (which increases administrative costs), and more use of tax-advantaged flexible spending accounts.
Bring Financial Wellness to Your Employees
Financial wellness added to your existing wellness programs can help your employees and your bottom line. That’s why FiduciaryFirst has implemented The Participant EffectSM, a comprehensive financial wellness program that gives your employees the tools they need to address their own financial stress. Please call us at 866-625-4611 to find out how The Participant EffectSM can help you address your employees’ financial fitness.
Tracking number: 1-410748
This information was developed as a general guide to educate plan sponsors but is not intended as authoritative guidance or tax or legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation. In no way does advisor assure that, by using the information provided, the plan sponsor will be in compliance with ERISA regulations.
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