Worry While You Work: Employees Worrying at Least Once a Week About Personal Finances, Finds John Hancock Financial Stress Survey
October 23, 2019 by John Hancock Retirement
Employer Financial Wellness Programs May Help with Stress and Retention
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BOSTON, Oct. 22, 2019 /PRNewswire/ – John Hancock Retirement today announced the results of its sixth annual Financial Stress Survey of retirement plan participants, revealing the weight of financial stress on workers and its impact on employers. The survey reports that more than half of respondents worry about personal finances at work at least once a week, causing workplace distraction and loss of productivity. This loss of productivity combined with absenteeism from financial stress has major impact on organizations, costing more than an estimated $1,900 per year, per employee, and totaling an estimated annual loss of $1 million for midsized employers and $19 million for large employers.1
The survey did find that employer financial wellness programs may improve job retention, stress levels and job productivity. Seventy-seven percent of respondents find financial wellness programs important and seven in ten feel these programs have helped reduce their financial stress and increased their loyalty to their employer. While 88% of employers say they currently have or are developing a financial well-being strategy, only 20% of participants claim their employer offers anything more than a limited financial wellness program.2
“Our 2019 Financial Stress Survey highlights a downward trend on retirement readiness and indicates participants’ financial situations are at risk, with 36% of participants responding they are not in a good financial situation,” said Patrick Murphy, CEO, John Hancock Retirement. “Seventy-one percent of participants are worried about having financial difficulties – the most we have seen from this survey in the past six years. We must come together as recordkeepers, financial representatives, and plan sponsors to help participants plan for their future and better understand the underlying cause of financial stress and its effect on retirement savings.”
Year over year, the number one financial worry is saving for retirement, except for those with student loan debt. Higher than in previous years, as much as 51% of workers consider themselves behind schedule when it comes to saving for retirement. Lack of emergency savings is the number two financial worry among all participants, and 25% have no emergency savings at all, which is even more pronounced for Generations X, Y, and Z where almost a third are in that position. The survey also found that fewer people are taking action to help their financial situation, with only about one of four respondents having met with a financial advisor, contributed to an IRA or allocated to a health savings account.
John Hancock’s 2019 Financial Stress Survey highlighted the following:
- Concerns about personal finance affects workplace productivity: Forty-nine percent of respondents feel they would be at least somewhat more productive at work if they did not worry about finances while at their jobs – up from 43% last year. This is disproportionately impacting the younger workforce; Millennials (22%) and Gen Xers (18%) are more likely than older generations (11%) to say they would be much more productive without financial worries.
- Confidence decreases in ability to make financial decisions: Only 18% of respondents feel very confident in their ability to make the right financial decisions, showing a decrease over the past three years. Only about one-third consider themselves very knowledgeable about basic financial concepts, such as managing debt (33%) and budgeting (31%). This is a disadvantage for the progress of retirement saving. Fifty-seven percent of respondents agree they would do more to save for retirement if they had more knowledge on how to prioritize their financial challenges.
- Increase in retirement contributions: Forty-eight percent of participants have increased contributions over the past two years. However, there is still uncertainty when it comes to knowing how much will be needed in retirement and a gap between what they think they should be saving and what is actually being put away. More concerning is that 10% aren’t saving anything at all and 25% are only saving between 1% and 5%.
Mr. Murphy added, “We recognize the potential impact that working with a financial representative and participating in a workplace financial wellness program may have on a participant’s ability to contribute more significantly to savings and stay on track for retirement. We have also identified the critical areas where participants need help planning for retirement, and are committed to bringing personalized programs to market, that help them tackle the key components of financial stress.”
Tools for financial success
John Hancock Retirement has recently enhanced its participant financial education content and tools via a new online learning management system – My Learning Center. This system tracks and rewards participant’s interaction and serves up key content on the platform’s homepage to help plan participants improve their financial literacy, assess their personal finances, and work toward retirement readiness at all life stages. Through this offering, plan participants can view their financial lives holistically and then opt into individualized goal–based action items to increase financial literacy and proactively work towards financial wellness. Plan sponsors then use the enhanced data coming from these resources to inform targeted employee education campaigns to help improve outcomes.
The 2019 John Hancock Financial Stress survey was commissioned by John Hancock and conducted by Greenwald & Associates. An online survey of 3,547 John Hancock plan participants was conducted in June 2019.
About John Hancock Retirement
As of June 30, 2019, John Hancock serviced over 60,000 plans with over 2.8 million participants and over $170 billion in AUMA*
* As of June 30, 2019, John Hancock Life Insurance Company (USA) supported 46,547plans, 1,605,076 participants, and $88,464,393,180 in AUMA. John Hancock Life Insurance Company of New York supported 2,527 plans, 75,000 participants, and $5,165,273,862 in AUMA. John Hancock Retirement Plan Services, LLC supported 11,058 plans, 1,207,998 participants, and $77,201,601,108 in AUMA. Participant Counts reflect all active participants with a balance. Approximate unaudited figures for John Hancock, provided on a U.S. statutory basis.
About John Hancock and Manulife
John Hancock is a unit of Manulife Financial Corporation, a leading international financial services group that helps people make their decisions easier and lives better. We operate primarily as John Hancock in the United States and Manulife elsewhere. We provide financial advice, insurance and wealth and asset management solutions for individuals, groups and institutions. Assets under management and administration by Manulife and its subsidiaries were over CAD $1.1 trillion (US$877 billion) as of June 30, 2019. Manulife Financial Corporation trades as MFC on the TSX, NYSE, and PSE, and under 945 on the SEHK. Additional information about Manulife can be found at manulife.com.
One of the largest life insurers in the United States, John Hancock supports approximately 10 million Americans with a broad range of financial products, including life insurance, annuities, investments, 401(k) plans and college savings plans. Additional information about John Hancock may be found at johnhancock.com.
About Manulife Investment Management
Manulife Investment Management is the global wealth and asset management segment of Manulife Financial Corporation. We draw on more than 150 years of financial stewardship to partner with clients across our institutional, retail, and retirement businesses globally. Our specialist approach to money management includes the highly differentiated strategies of our fixed-income, specialized equity, multi-asset solutions, and private markets teams—along with access to specialized, unaffiliated asset managers from around the world through our multimanager model. Our personalized, data-driven approach to retirement is focused on delivering financial wellness in retirement plans of all sizes to help plan participants and members retire with dignity.
Headquartered in Toronto, we operate as Manulife Investment Management throughout the world, with the exception of the United States, where the retail and retirement businesses operate as John Hancock Investment Management and John Hancock, respectively; and in Asia and Canada, where the retirement business operates as Manulife. Manulife Investment Management had C$844 billion (USD $645 billion) in assets under management and administration as of June 30, 20193. Not all offerings available in all jurisdictions. For additional information, please visit our website at manulifeinvestmentmgt.com.
- This is a hypothetical illustration used for informational purposes only, based on data from John Hancock’s 2019 Financial Stress Survey. The example assumes 3.2 hours of work missed per year and 43.95 hours in lost productivity due to financial stress. Average wages used in the calculation are based on 7/31/2019 John Hancock participant data. The John Hancock Financial Stress Calculator is intended to provide general information about how much financial stress can cost a company every year. Individual circumstances may vary and there is no guarantee that the results shown will be achieved, and the assumptions provided may not be reflective of personal situations.
- “Hot Topics in Retirement and Financial Wellbeing,” Alight, 2019, https://ideas.alight.com/wealth/hot-topics-highlights-financial-wellbeing.
- MFC financials. Global Wealth and Asset Management AUMA as of June 30, 2019 was C$844 billion and includes C$191 billion of assets managed on behalf of other segments and C$136 billion of assets under administration.
John Hancock Retirement Plan Services, Boston, MA 02116.
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SOURCE John Hancock Retirement