47% of American workers feel financially well, up from 42% at this time last year. This is according to Bank of America’s 14th annual Workplace Benefits Report, “The Resurging Workforce.”
The report is released in partnership with Bank of America Institute. It reveals that 53% of employees are concerned that economic uncertainty will affect their long-term retirement savings. The figure is down from 63% in 2023.
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Meanwhile, the gap in financial wellness between men and women continues to grow. 53% of men report good financial wellness compared to 36% of women. In addition, employees express concern about inflation. Some 76% of workers say that the cost of living is outpacing growth in their salary or wages. This compares to 67% in June 2023.
“Despite concerns about the cost of living and plans to limit expenses, more employees are feeling confident about their financial well-being,” said Lorna Sabbia, Head of Workplace Benefits at Bank of America. “However, there is still work to be done to address gender equity. Women continue to report much lower financial wellness scores than men.”
2024 Workplace Benefits Report key insights
- 6 in 10 workers are limiting current expenses. Many employees say they are taking proactive steps to improve their financial wellness. This includes limiting expenses (62%), paying down debt (43%) and adding to emergency funds (41%).
- Job loyalty remains high. 70% of employees plan to keep their jobs for the next year. Good work/life balance is the top reason employees want to stay (66%). Of those who plan to leave, compensation (52%) was the top reason for the switch, followed by career growth (45%).
- Pay equity is becoming a powerful recruitment tool. Only 44% of employers currently address pay equity. However, those with pay equity initiatives in place notice an impact. 78% report an improvement in attracting top talent vs. 50% without such initiatives.
- There’s a potential disconnect in retirement health care expenses. Most Americans drastically underestimate the cost of health care in retirement. Current research shows that a retired 65-year-old couple could need more than $350,000 in savings to cover their retirement health care expenses. However, according to this new Bank of America report, only 7% of employees think their yearly health expenses in retirement could total even $10,000.
US workers re-prioritise retirement savings
The number of employees prioritising long-term retirement savings is slowly trending upwards (33% today, up from 31% in 2023). This has become their top financial goal, overtaking those focused on short-term financial needs last year. Debt assistance is emerging as an attractive benefit. Employers are starting to explore ways they can support employees with debt. 37% now offer student loan repayment assistance.
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