Employee Financial Wellness in America

The adverse economic consequences of the pandemic brought significant change in the lives of many, affecting our workplaces, employees, families and communities as a whole. Employees are feeling the impact, and there is growing evidence that the majority lack the financial skills necessary to tackle these challenges.

 

It’s no surprise that employee financial stress is at an all-time high. In fact, 64% are stressed about their financial situation, and 67% believe that the cost of living is outpacing growth in their income.1 When employees are stressed about their finances, it has deep impacts on workplace productivity, creativity and morale. The good news is that employees are looking to their employers for help, and we’ve seen employers’ sense of responsibility grow, significantly expanding the scope of financial wellness programs.

 

This study focuses on understanding — through a generation, gender and income2 lens — the financial wellness of 105,127 401(k) participants on Bank of America’s record-keeping system. We’ve also included trend analysis from 135,195 401(k) participants in 2021 and 88,714 participants in 2022. The findings can help employers gain a greater understanding of employees’ behaviors and financial needs so they can better tailor workplace benefits programs that inspire employees to take action to help improve their financial health.

 

Key findings

1. Our study shows that employees are struggling to manage short-term expenses as well as meet long-term financial goals.

A scale with short-term expenses lower than long-term financial goals

2. Women continue to trail men in managing their day-to-day finances, which limits their ability to make progress toward saving for retirement.

3. Younger generations are weighed down by student debt, while older generations are at risk of not having enough money to retire. 

4. Lower income groups are often unable to make ends meet, are carrying credit card debt and may find it difficult to cover their living expenses in the event of job loss or unexpected expense. 

2024 Financial Wellness Study

This year’s brief study examines the financial wellness of 329,036 401(k) participants in Bank of America’s record-keeping system, considering factors such as gender, generation, and income. Employers can benefit from the insights of this study by gaining a deeper understanding of employees’ behavior and financial needs, allowing them to tailor workplace benefit programs that inspire employees to help improve their financial health.

Read our study and brief study for a more in-depth look at these findings.

1 The transforming workplace: Insights to help companies evolve with the needs of today’s workforce, 2023 Workplace Benefits Report, Bank of America Corporation, 2023.

2 Refers to household income.

3 Bank of America 2022: Gender Lens in Defined Contribution (DC) Plans study of 3.1 million 401(k) plan participants shows that the median 401(k) balances for women are approximately two-thirds that of men.

4 Based on data from the Federal Reserve Report Economic Well-Being of U.S. Households in 2022, May 2023. One in every five Americans has a student loan debt, and even though the majority of the debt is held in large loans, most of the students indebted owe $20,000 or less. Michael Dimock, “Defining generations: Where Millennials end and Generation Z begins,” Pew Research Center, January 17, 2019. Baby boomers between 1946 and 1964, Generation X between 1965 and 1980, millennials between 1981 and 1996, Generation Z after 1996. Silent, defined as people born before 1946, and participants where date of birth is not available are ignored in the total count by age, hence the totals may not equal 100% of participants.

5 On track for retirement: Current retirement savings as a percent of target retirement savings is greater than 50%. Target retirement savings is how much an employee should have saved to be on track for retirement, given their current age and income. As an employee ages, the target retirement savings increases.

6 Source: Bank of America Financial Wellness Tracker for the period January 2021 to December 2023. Based on the responses of 329,036 401(k) participants. Calculations by CIO Portfolio Analytics.

 

Download the study and brief

Employee Financial Wellness in America
Employee Financial Wellness in America Brief

Contact a team member today

Let us help you differentiate your business and empower your employees to take control of their full financial lives.

Get in touch