Prioritizing emergency savings over retirement funds has become an emerging trend. A recent survey by the Employee Benefit Research Institute (EBRI) and Greenwald Research reveals a notable shift in the top financial concerns of American workers. Saving for retirement, a long-standing top concern, has now been surpassed by worries about having enough savings to cover emergencies. The survey indicates that nearly half of the respondents would need to dip into their savings or investments to handle an unexpected expense of $5,000 or more.
Monthly expenses and saving enough for retirement now come in as the second and third most stress-inducing financial issues, respectively. Over 80% of respondents expressed concerns about a potential recession or persistently high inflation in the coming year, underscoring broader economic anxieties. Health insurance emerged as the most crucial employment-based benefit, significantly impacting job satisfaction, and mental health benefits gained importance over the past year. Additionally, caregiving responsibilities and inadequate financial preparedness for reduced work hours due to caregiving needs were highlighted as significant stressors among respondents. Overall, financial worries have a substantial impact on the mental health and well-being of employees, affecting their performance at work.
For more on this, visit this week’s episode of 401(k) Real Talk where Fred Barstein lists this story on his most interesting/important stories of the week.
