As a result of improvements in managing day-to-day finances, employees are shifting their focus to long-term financial planning issues such as retirement planning, according to a new report.
Financial Finesse, Inc., El Segundo, Calif., published this finding in a Year in Review 2011 research report that covers trends in employee financial issues.
Employees dramatically increased their focus on retirement planning in 2011, the report finds. For the year, 31% of employee questions were related to retirement planning compared to 24% in 2010. Retirement planning was followed by debt management (14%), investing (14%), and budgeting and saving (13%) as the top areas of concern.
In total, 62% of questions were related to long-term planning issues (compared to 55% in 2010). This trend is positive despite global financial concerns, the report says.
However, with the increased focus on retirement planning, employees feel no more prepared than they did a year ago, most likely due to a growing awareness of just how far behind they are and mounting concerns about increases in health care expenses, taxes and inflation eroding retirement savings, the report says.
In 2011, employees reported reduced financial stress, with 19% indicating “high” or “overwhelming” levels of stress compared to 32% in 2010 and 33% in 2009. The survey says the reduction in problematic financial stress represents a “significant improvement” and provides evidence of a continuation of a trend that was noted during the 2010 Financial Finesse Research Year in Review.
However, even with this positive trend, financial stress still remains a pervasive problem with 84% of employees reporting some level of financial stress and many studies showing that financial issues are both the leading cause of stress and one of the most damaging on the body.
Retirement preparedness remains unchanged from 2010, as only 17% of employees indicated they are on track to replace 80% of their current income (or their own goal), the report says.