Underfunding retirement adds to workers’ stress

Photo: AP 

More than half of lower and middle-income women who juggle work and motherhood say they carry high or overwhelming levels of financial stress, according to data from a provider of workplace financial wellness programs.

That’s significantly higher than stress levels across all demographics and earning levels, as 18 percent of all workers reported high levels of stress, and another 5 percent said they feel overwhelming stress.

Stress levels varied dramatically relative to demographics, but one consistency was that women reported higher levels of stress than men in all age groups, according to Financial Finesse’s 2015 workplace stress report.

While many factors contribute to stress levels, the data shows a clear correlation between the most stressed workers and their ability to address retirement savings.

Women feel more stress during retirement than men do, a recent study shows. However, women suffer more from stress before…

Wellness scores were assessed on eight different areas of financial preparedness, ranging from cash management, debt management, investing, and including retirement planning.

Those with high or overwhelming stress levels reported poor wellness scores on retirement savings. The data shows that as the most stressed workers struggle to manage everything from debt to taxes.

In 2014, three in 10 workers reporting overwhelming stress said they were not contributing at all to employer-sponsored savings programs.

When the most stressed workers can contribute, four in 10 aren’t deferring enough cash to capture the employer match.

Those numbers support auto enrollment and escalation features, say researchers from the Southern California-based firm.

Even workers who report no financial stress are reluctant to use a retirement calculator to factor how much of their income they are on pace to replace in retirement.

Only 40 percent of those without any stress have used a financial calculator, a bit more than the 30 percent of the most stressed workers who have.

Not surprisingly, only 4 percent of the most stressed workers say they are on track to replace 80 percent of income in retirement, an aggressive goal. Even though those with stress overwhelmingly contribute enough to retirement plans to meet employer-matching requirements, only 33 percent say they are on a path to replace 80 percent of income.

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