Financial Wellness and Retirement Savings Not Top Priority
Financial wellness and retirement savings do not get top billing when it comes to living expenses. Housing expenses can take precedence over financial wellness and retirement savings. The high cost of renting in many U.S. cities has become a real obstacle to many workers; impeding their ability to achieve financial wellness and save for retirement.
That hampers many employers’ efforts to improve healthcare, financial wellness, and retirement savings benefits. Financial wellness and retirement planning can reduce workers’ stress, enhance productivity and provide advancement opportunities for younger employees, according to a recent article in BenefitsPro.
It seems the high cost of rent is becoming prohibitively expensive from coast to coast, creating affordability and budgeting problems for workers, especially younger employees. Exorbitant rents are getting in the way of employees’ ability to achieve financial wellness or security, especially when it comes to their being able to save for retirement. According to a Huffington Post report cited in BenefitsPro, “‘There’s not a single state, metropolitan area or county in the U.S. where a full-time worker earning the minimum wage can afford the rent for a modest two-bedroom apartment.’” That is cause for concern.
Paying the rent is creating quite a challenge for employees. High rents are impacting employers who promote financial wellness and retirement savings programs. In addition, employee stress related to finances is manifesting itself in the workplace. Stress not only undermines employers’ financial wellness efforts; it also impacts the bottom line. Financial stresses have resulted in a 34% increase in absenteeism and tardiness, according to the Society for Human Resource Management (SHRM). And financially stressed employees miss almost twice as many days (3.5) per year compared to their unstressed peers, as one study from the Center for Retirement Research at Boston College uncovered.
Financial stress distracts employees from getting their work done. Thirty-four percent of Generation X, 16% of Baby Boomers, and 37% of Millennials say their finances derail their productivity at work, according to a PricewaterhouseCoopers Employee Wellness Survey. PwC also found that nearly half of employees get distracted by their financial stress more than three hours per week. These are all factors that again, disrupt employers’ best efforts at creating an environment of financial wellness and retirement savings for their workforce. Financial stress is also playing a significant role in rising healthcare costs. According to the American Psychological Association, 1 in 5 people put off or consider skipping health care visits due to the cost. Financial stress further impairs financial wellness and retirement savings. Retirement Savings now is a lower priority to paying rent and keeping a roof over their heads.
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