Information extracted from the Financial Wellness 2019 Year in Review

In recent months, America has been battling COVID-19. No one knows for certain the long-term effects that this will have on financial wellness, but there are notable trends emerging since the announcement of COVID-19 as a global pandemic.

Older workers are more interested in wealth protection.

More employees are citing “protecting my wealth” as a primary concern, which makes sense as asset values have dropped substantially following the outbreak of COVID-19. Employees that may have once anticipated retirement based on prior asset values are having to reconsider their plans. Concern for protecting wealth has risen most for older employees, such as those 55+.

Six out of ten workers now cite the stock market and economy as a primary source of stress.

Sixty percent of workers worry about the stock market and U.S. economy, up from 45 percent before the outbreak. A change of this magnitude should grab employers’ attention. Now is the time for employers to provide security and perspective to calm employee fears and to help them understand that historically those who try to time the market generally fare worse than those who stay invested. Any efforts deployed through a retirement plan record keeper or financial wellness provider has the potential to make a significant difference in employees’ retirement preparedness and long-term financial security.

Despite the decrease in the percentage of employees that cite lack of control over their current financial situation as a source of financial stress, uncertainty about reaching future financial goals is on the rise. This may indicate employees’ belief that the financial implications of COVID-19 will be long lasting and may have a significant impact on their ability to achieve key financial goals even after this is over.

Lastly, there is a hint of growing anxiety about not knowing who to trust with investing money. We expect scams to increase during COVID-19 which will likely cause greater uncertainty among employees. Since 80 percent of U.S. employees trust their employers to do what is right, employers have a responsibility to ensure any information, education, or guidance provided to employees comes from a reliable source free of any conflicts of interest.

One in four pre-retirees is more likely to have a distribution strategy.

Employees age 55+ with household incomes in excess of $100,000 were asked about plans for taking distributions in retirement. The percentage of the group studied that have not created a distribution strategy fell from 52 percent to 40 percent, while the percentage that has taken the step of creating a distribution strategy rose from 18 percent to 25 percent. It’s possible that some within this group have reevaluated their proximity to retirement following recent market declines.

Interest in working with a financial advisor grows.

Employees with household incomes in excess of $100,000 were asked how they manage their investments. The percentage of the group studied that feel comfortable managing their own portfolio fell from 47 percent to 43 percent, while the percentage that work with a financial advisor rose from 24 percent to 29 percent. Among this group, only 28 percent cite not knowing who to trust with investing money as a primary source of financial stress mid-COVID-19.

For More Information

Educating your employees and making a commitment to their overall financial wellbeing is incredibly important to help them achieve their financial goals – today and in the future. Incorporating a financial wellness program into your benefits offering can help assist employees with creating savings, reducing and eliminating debt, relieving financial stress, preparing for retirement and more. If you are interested in learning more about financial wellness, you can contact one of our specialists here.

The information and statistics included in this article were extracted from the Financial Wellness 2019 Year in Review report which is based on the analysis of 271,776 financial wellness assessments completed by American employees within the last nine years.

CBIZ Retirement Plan Services is a trade name under which certain subsidiaries of CBIZ, Inc. (NYSE Listed: CBZ) market investment advisory, investment management, third party administration, actuarial and other retirement plan services. Investment advisory and investment management services offered through CBIZ Investment Advisory Services, LLC, Registered Investment Adviser.  Investments, investment advisory and investment management services may also be offered through CBIZ Financial Solutions, Inc., Member FINRA, SIPC and Registered Investment Adviser, dba CBIZ Retirement Plan Advisory Services.  Third party administration, actuarial and other consulting services offered through CBIZ Benefits & Insurance Services, Inc.