Understanding Employee Financial Wellness: Key Insights from a Recent Report

Recent findings from a comprehensive survey underscore critical financial wellness issues affecting today’s employees, revealing the challenges they face in achieving financial stability. Below, we delve into the essential areas of concern, including emergency savings, personal debt, retirement readiness, and more.

The Importance of Emergency Savings

Emergency savings remain a priority for employees, ranked as their second-most crucial financial goal, only after retirement savings. However, a startling 53% of employees have not met their emergency savings targets. This issue is more prominent among women, with 62% reporting they fall short compared to 44% of men. Many cite living paycheck-to-paycheck as a key barrier to achieving their savings goals.

Why Are Employees Struggling?

The struggle to save stems largely from financial overwhelm. Many employees face multiple financial obligations and feel they lack the resources to manage them effectively.

Personal Debt: A Major Obstacle

Another significant finding is that nearly 45% of employees attribute their lack of emergency savings to prioritizing debt repayment. This trend is understandable, given that 85% of employees carry some form of personal debt, including 58% who have credit card balances. The burden of debt not only affects financial security but also contributes to heightened stress levels, impacting workplace focus and productivity.

Limited Support from Employers

Only 1 in 3 companies currently provide credit counseling or debt assistance services, with most focusing solely on student loan support. However, many employers express intentions to broaden their offerings in the near future.

Retirement Readiness: Are Employees Prepared?

Despite challenges, 67% of employees feel confident about their progression toward retirement goals. Nonetheless, confidence varies significantly based on gender and life stages. While 72% of men feel on track, only 59% of women share this sentiment. Notably, 49% of employees wish they had begun saving for retirement at an earlier age.

The Role of Equity Awards in Talent Retention

Equity awards are increasingly recognized as essential for attracting and retaining talent, with 60% of employers highlighting their significance. Roughly 48% of employees have expressed interest in their employers offering stock awards in the coming years. Among employers currently providing equity awards, 66% have increased the number of employees receiving them over the last three years, with 83% considering plans for further expansion.

A Growing Focus on Financial Benefits

As noted by Kai Walker, Head of Retirement Research and Insights at Bank of America, “Some companies are evolving their financial benefits to keep pace with the needs of their employees, while others remain fixated on traditional offerings.” Programs targeting financial wellness, debt assistance, and equity awards can be pivotal in fostering an attentive and committed workforce.

Methodology of the Survey

The findings presented here stem from a comprehensive survey conducted by Escalent, which included 962 full-time employees participating in 401(k) plans and 800 employers who offer such plans. The survey spanned from December 2, 2024, to January 13, 2025, and was later supplemented with additional employee-focused research in 2025.

Conclusion

The insights gathered highlight the pressing need for organizations to prioritize employee financial wellness. By addressing significant concerns such as emergency savings, debt management, and retirement preparedness, companies can create a supportive environment that enhances employee satisfaction and retention.

For more information on improving financial wellness within your organization or details related to the survey’s findings, please contact Don Vecchiarello at Bank of America at 1-980-387-4899 or via email at don.vecchiarello@bofa.com.

Explore the importance of employee financial wellness and the role of comprehensive support programs in enhancing workforce satisfaction and retention.