EL SEGUNDO, Calif.-American workers' financial fortunes have improved since the worst days of the recession, but 2012 saw some employees backsliding, and retirement saving remains a struggle.
Those are key findings from a 2012 "Year in Review" study recently released by Financial Finesse, which tracks employee financial wellness. The report found that overall financial wellness took a backslide in 2012, but it still finished ahead of 2009 and 2010.
The most substantial declines were found to be in the area of cash management, including:
*The percentage of employees who feel they have a good handle on cash flow slipped from 72% in 2011 to 68% in 2012. The 2010 figure was 64%.
*Only 51% of employees say they have an emergency fund, as opposed to 56% in 2011 and 48% in 2010.
*The percentage of employees that report regularly paying credit card balances in full slipped from 62% to 56%, though that's still an improvement over the reported 51% in 2010.
*The percentage of employees reporting "high" or "overwhelming" financial stress remained fairly static, dropping from 19% to 18%.
*The number of employees reporting having borrowed funds or taken hardship withdrawals from their 401(k) rose from 25% in 2011 to 32% in 2012.
Few Are On Target
Overall financial wellness declines and the number of employees reporting dipping into retirement funds was most pronounced among lower-income employees, women, and Gen X. Only 17% reported that they are on target to replace 80% of their income upon retirement, and only 33% said they were confident their investments were properly allocated.
However there remains a significant difference between the men and women when it comes to investments and understanding investment markets, with men ahead in both categories. While there is a 13-point gap between the sexes when it comes to feeling that investments are properly allocated, that gap rises to 20 points when it comes to having a general understanding of stocks, bonds and mutual funds.
To view the full report: http://www.financialfinesse.com/research-best-practices/2012-research-year-in-review/#more-6857
MORE@CUJOURNAL.COM
Subscribers can read related stories at www.cujournal.com and searching the following headlines:
"Improving Staff's Bottom Lines Aids CU Bottom Line," Feb. 25
"Financial Wellness On The Rise," Jan. 7
