BOA Merrill Lynch WBR Slideshow

Saving for Retirement and Healthcare

Over the last 5 years, employees have increased their focus on retirement and rely more heavily on the workplace benefit plans provided by their employers

Nearly four in five participants feel that the financial benefits they participate in at work improve their financial wellness.
However, 56% of all plan participants report that they are saving less for retirement as a result of increasing health care costs

Health care is a critical benefit to employees. They are concerned about the potential effects of a health care “shock” on their financial wellness.

In the 2013 report, we see firsthand just how important retirement and health care benefits are to employees’ overall financial wellness. At a time of more economic challenges and increasing cost pressure, employees are relying on their benefits more than ever.

Benefit Plans Are Making A Difference

The importance of a well-designed retirement plan is more important than ever and is the key to retirement readiness and financial wellness during employment.

66% are contributing 5% or more of their salary into a 401(k)

71% reported that their workplace benefit plans will be their 1st or 2nd largest source for retirement income.
78% contributed enough last year to get maximum employer match

Employees express a desire for their employer to provide tools and resources that empower them.
58% have increased their contributions since enrolling in their plans

The importance of retirement benefit plans at work is not lost on employees. But maximizing plan contributions still has a long way to go: only 20% contribute to the annual maximum limit. Saving only to the match is unlikely to help employees achieve retirement income goals.

Health Care is Increasing in Importance

48%

Only 48% of all employees report that they can always meet their health care expenses.
76%

76% report it would be a problem if they had a health crisis that required them to be 3 months away from work, unpaid.

80% of all participants have experienced increases in health care costs within the past 2 years.

Management of health care costs has become a major challenge for most employees. More employers are offering, and more employees are enrolling in tax-advantaged health care accounts. But costs are challenging for employees to manage.

Financial Wellness Score*

11
25
65

2
4
5
7
8
10
11
11
13
14
17

10
9
8
7
6
5
4
3
2
1
0

Financially Well
Not Financially Well

11% of participants scored in the financially well group. (Financial Wellness Score of 8 to 10.)

25% of all participants fell somewhere in between (Financial Wellness Score of 5 to 7), and may be poised to become financially well, or to fall into the not financially well group.

65% of all participants scored in the not financially well category. (Financial Wellness Score of 4 or lower.)

The new Financial Wellness Score* is a composite of scores from more than 1,000 employees. If they provided a positive response to all components, they would have a Financial Wellness Score of 10.

* The Financial Wellness Score is a composite of survey responses to 10 components identified by Bank of America Merrill Lynch as central to employee’s pursuit of financial wellness.