A recent survey sheds light on the state of financial wellness since the pandemic.
According to the TIAA 2022 Financial Wellness 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% say it decreased
However, when it comes to actually achieving overall financial wellness during the pandemic, many people still feel challenged in a number of ways including:
- While 7 of 10 people say they have a budget, only 25% of them actually follow it
- 6 of 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 six 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
92% 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 toward retirement. If given an additional $200 a month, nonretired Americans would put an average of 60% toward 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://www.tiaa.org/public/pdf/2022_financial_wellness_survey_final_results.pdf.
Heartland Retirement Plan Services are offered through Dubuque Bank and Trust Company. The information provided herein is general in nature and is not intended to be nor should be construed as specific investment, legal or tax advice. The factual information has been obtained from sources believed to be reliable, but is not guaranteed as to accuracy or completeness. Heartland Retirement Plan Services makes no warranties with regard to the information or results obtained by its use and disclaims any liability arising out of your use of, or reliance on, it. Products offered through Heartland Retirement Plan Services are not FDIC insured, are not bank guaranteed and may lose value, unless otherwise noted.