A recent survey sheds light on the state of financial wellness since the pandemic
According to a recent survey, Americans currently define financial wellness as simply feeling comfortable with their financial situation. Over 50% believe wellness is defined as having the means to take care of family, not worrying about money or debt, and feeling protected financially from life’s unexpected events. In fact, 51% of Americans are now more aware of their overall financial wellness since the pandemic.
Over the past two years:
37% say their financial wellness increased
42% say it stayed the same
21% report a decrease
However, when it comes to achieving overall financial wellness during the pandemic, many people still feel challenged in a number of ways:
While 7 in 10 people say they have a budget, only 25% of them follow it
6 in 10 people report some or a great deal of stress regarding their finances
Only 38% have a written financial plan; only 16% have one created by a professional
78% say they have an emergency fund; less than half say they can cover 6 months of expenses
It’s probably no surprise that workers who have participated in a financial wellness program are twice as likely to have a high financial wellness rating than those who are not offered resources or who do not participate (32% vs. 15%). The survey indicates that higher financial wellness ratings can translate into improved engagement with their retirement plan.
Implications for improving retirement outcomes
Ninety-two percent of those with high financial wellness scores report understanding their retirement plan extremely or very well. Conversely, 39% with low financial wellness scores report understanding their plan extremely or very well.
Of those employees who have participated in a financial wellness program:
54% are confident they will retire when they want
54% are confident they will afford the retirement lifestyle they want
50% are confident they will not run out of money
In addition, people with higher financial wellness scores are willing to put more money towards retirement. If given an additional $200 a month, nonretired Americans would put an average of 60% towards their retirement savings. This increases to 71% among those who rate their financial wellness higher (vs. 45% of those with low financial wellness) Those with higher financial wellness are also already more likely to have retirement savings and to be contributing to an employer retirement plan.
*The TIAA “Financial Wellness Survey” was conducted online from October 22 to November 3, 2021. surveying 3,008 Americans ages 18 and older on a broad range of financial management issues and topics. It can be viewed at: https://tinyurl.com/5e2vpvbm.