When it comes to overall financial wellness, Americans feel challenged on multiple fronts. But employer-provided information and financial wellness programs go a long way toward helping many people keep their financial lives on track and feel more confident about their finances, according
Employer-sponsored financial wellness support is both needed and wanted by employees.
The TIAA Financial Wellness Survey was conducted online from October 22 to November 3, surveying 3,008 Americans ages 18 and over on a broad range of financial management issues and topics.
Just 22% of Americans rate their own financial wellness as high (a 9 or 10 out of 10), the TIAA survey found. 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.
The good news is that employer financial wellness programs appear to help ease money concerns of Americans, in particular Gen Z, which in some respects, is the most financially challenged of all.
“Employer-sponsored financial wellness support is both needed and wanted by employees, especially for workers who might need help the most,” said Snezana Zlatar, senior managing director and head of financial wellness advice and innovation at TIAA. “People who have taken part in an employer financial wellness program can see a considerable difference, indicating that it truly makes sense for employers to redouble their activities on this front.”
Employees who have taken part in an employer-sponsored financial wellness program focused on retirement, debt management, education saving, budgeting, managing healthcare costs, investing or a similar topic are twice as likely as other employees to have a high financial wellness score (32% vs. 15% of those either not offered any benefits or offered but did not participate).
They also are much more confident about their progress on key markers of good retirement planning, such as being able to retire when they want to (54% vs 32%), afford the retirement lifestyle they want (54% vs 29%), and live comfortably in retirement without running out of money (50% vs 29%).
Those benefits hold true especially for Gen Z workers, with financial wellness programs supporting higher financial wellness scores as well as greater retirement confidence. Gen Z (as well as Millennial) people who have taken advantage of a program are also more likely to say they have taken key actions to improve their finances and retirement picture. (Retirement related improvement action: Gen Z: 53% vs. 23%, Millennial: 56% vs. 31%).
Financial Stress and Prioritizing Immediate Needs
Six in 10 Americans report being 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.
For most Americans, day-to-day financial concerns are paramount – and longer-term issues receive less focus. 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.
The TIAA survey also 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.
“It’s hard for employees to focus on their retirement when there are more immediate pressing needs,” said Zlatar. “The most impactful financial wellness programs help address both short-term and long-term goals since they are linked together.”
Employer Responsibility and Roadblock
Over half of survey respondents – and 65% of Gen Z respondents — agree that employers have a responsibility to help employees improve and maintain their financial wellness.
Even so, about three in four workers (and Gen Z in particular) have some reservations about using that support: the most common are the possibility of hidden costs or fees and not wanting to disclose finances or financial issues to their employer.
“It’s natural for employees to have questions about cost and confidentiality,” said Zlatar. “It simply means that employers need to assure employees that the guidance is offered purely in their best interest as part of the employer’s comprehensive financial wellness support.”
TIAA is a leading provider of secure retirements and outcome-focused investment solutions to millions of people and thousands of institutions. It is the #1 not-for-profit retirement market provider,1 paid more than $3.6 billion to retired clients in 2020 and has $1.3 trillion in assets under management (as of 9/30/2021).2