SANTA CLARA, CA – June 16, 2020 – A new survey conducted during the Covid-19 crisis by Edelman Financial Engines reveals close to half of American workers (47%) say they have “a lot” of financial stress. Those saving for retirement are less likely than non-savers to report financial stress (44% vs. 57%). Gen X and Baby Boomers report higher levels of financial well-being than Millennials, but large numbers of every age group and race are struggling, according to the survey. Among respondents, nonwhite workers are 2.6x more likely than white workers to describe themselves as poor.
Edelman Financial Engines, the country’s largest independent financial planning and investment management firm, surveyed 1,077 American workers the week of April 6, 2020 about their financial stress, economic concerns and use of financial advice. Nearly half of those surveyed reported relatively weak financial well-being across three different measures: level of financial stress, outlook, and ability to handle a mid-size financial shock.
“We are seeing high levels of financial stress among employees and it is impacting many aspects of their lives,” said Kelly O’Donnell, Executive Vice President at Edelman Financial Engines and head of the firm’s workplace business. The firm serves thousands of employers, including 137 of the Fortune 500, and its financial advice is available to more than ten million employees. “Companies that give workers better access to financial advice can help alleviate their employees’ financial stress, leading to increased productivity, lower turnover and reduced absenteeism.”
Covid-era Workers Concerned about Income Stability, Resilience of their Employers
Almost half (46%) of workers say they are “extremely” or “moderately” concerned about the stability of their household income. Among these workers, 85% are concerned about their own job, while 46% are concerned about their spouse’s income.
The survey also revealed that workers are “moderately” or “extremely” concerned about:
Only about two in five (44%) workers said they would be able to easily come up with $2,000 within 30 days for an emergency. More than 1 in 10 (11%) would not be able to raise any emergency funds at all, while nearly a third (30%) would need to make sacrifices and 14% would have to do something drastic to raise the money.
In the first two weeks of the pandemic, 10% of survey responders exhausted their emergency savings within the first month of the crisis, and one in three reported taking adverse financial actions, such as depleting their emergency savings or stopping contributions to their retirement accounts. Millennials were most likely to take such financial actions.
“Large numbers of American workers are suffering financially, and their plight is likely to linger even after the economy begins to recover,” O’Donnell said.
Many with high financial stress say it has had a detrimental effect on their work, including decreased productivity, loss of focus, and anxiety or tension in the workplace. Over a third of U.S. workers (37%) believe that they would benefit from receiving financial advice during this uncertain time. Non-savers (43%) and Millennials (47%) feel they would benefit the most from talking to a financial adviser.
Opportunities for Employers
Indeed, the survey revealed many opportunities for employers to help improve their employees’ financial well-being, such as:
Without these programs and resources, workers may face prolonged and severe financial stress, resulting in decreased productivity, loss of focus, and anxiety or tension in the workplace. During the early days of the Covid-19 pandemic, one in five retirement plan savers said they changed their retirement savings behavior, whether by re-allocating, pausing contributions, or accessing retirement savings pre-retirement via loan or withdrawal.
These actions are often triggered by emotions rather than an informed plan and can threaten a worker’s future retirement security. “When individuals borrow or withdraw money from retirement accounts, it becomes less likely that they will achieve their retirement savings goals,” O’Donnell said. “Pausing contributions or making improper risk allocations can also harm them, especially after a market downturn. All these mistakes can reduce their ability to benefit from economic recovery.”
For more information, visit EdelmanFinancialEngines.com.
About Edelman Financial Engines
Since 1986, Edelman Financial Engines has been committed to always acting in the best interest of our clients. We were founded on the belief that all American investors – not just the wealthy – deserve access to personalized, comprehensive financial planning and investment advice. Today, we are America’s top independent financial planning and investment advisor, recognized by both InvestmentNews2 and Barron’s3 with 168 planner offices across the country and entrusted by more than 1.2 million clients to manage more than $192 billion in assets4. Our unique approach to serving clients combines our advanced methodology and proprietary technology with the attention of a dedicated personal financial planner. Every client’s situation and goals are unique, and the powerful fusion of high-tech and high-touch allows Edelman Financial Engines to deliver the personal plan and financial confidence that everyone deserves.
Amy Conley, Edelman Financial Engines, PRTeam@EdelmanFinancialEngines.com
 Edelman Financial Engines research. 2019.
 Ranking and status for 2018. For independence methodology and ranking, see InvestmentNews Center (http://data.investmentnews.com/ria/).
 The 2019 Top 50 Independent Advisory Firm Ranking issued by Barron’s is qualitative and quantitative, including assets managed, the size and experience of teams, and the regulatory records of the advisers and firms. Firms elect to participate, but do not pay to be included in the ranking. Investor returns/experience are not considered.
 As of March 31, 2020.