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- The report found that 38% of employees think they'll have to
retire later than planned, a significant increase from the 24% who
said they'd need to delay retirement in last year's report.
- 67% percent of employees are interested in receiving financial
planning resources from their employer, and 20% would like mental
health resources.
BOSTON, April 18,
2023 /PRNewswire/ -Today, John Hancock Retirement, a
company of Manulife Investment Management, announced the results of
its stress, finances, and well-being report, the ninth annual
survey of its retirement plan participants. The report finds
employees' financial situations and mental health bearing the brunt
of the burden of a year where economic uncertainty and inflation
have upended saving and spending habits.
Widespread decline
With the market declines across asset classes in 2022 and the
potential for a recession dominating news coverage, 70% of
respondents say they're worried a great deal about the economy. The
most frequently cited issues were concerns about the impact of
inflation on the cost of living, general economic conditions, and
rising interest rates.
Nearly all respondents have taken note of rising costs in the
past six months, with the vast majority reporting increased
spending on groceries, household basics, gas, and monthly bill
payments.
Personal finances increasingly strained
Beyond concerns about economic conditions, in general, more than
half (58%) of workers are significantly worried about one or more
aspects of their personal finances, with some of the frequently
cited being saving too little for retirement, credit card debt, and
building emergency savings.
These financial worries are coupled with a noteworthy decline in
participants' financial situations to below prepandemic levels.
Employees are now more than twice as likely to describe their
personal finances as fair or poor (42%) as they are to call them
good or excellent (20%).
As household budgets are strained by inflation, one in three
respondents say it's currently challenging for them to save money
and 1 in 5 have dipped into their savings to be able to afford
day-to-day necessities.
"Coming out of the pandemic, we were hopeful to see continued
improvements in financial well-being, but our results showed how
quickly an uncertain economy can take those gains away," said
Aimee DeCamillo, head of Global
Retirement, Manulife Investment Management. "We did see some
resilience, however—despite their financial strain, more than 70%
of respondents said they'll be focused on growing, maintaining, or
investing their savings in the coming months, with almost half
citing paying off debt and planning for retirement as short-term
goals."
Generational divide in stress
Overall, mental health has seen a positive shift since last
year, with 65% describing their mental health as good compared with
53% previously. Despite this improvement, 7 in 10 say the
challenging economic backdrop has had some impact on their mental
well-being, with 16% of those saying it's had a major impact.
An even closer look at the data shows stark generational divides
in mental well-being, with three-quarters (76%) of boomers saying
their mental health is good/very good compared with less than half
(46%) of millennials who say the same. In addition, millennials
showed more likely than boomers to have experienced stress (89% vs.
67%), depression (50% vs. 28%), and loneliness (49% vs. 25%) in the
past year.
Employees' mental health issues are showing up on the job, with
43% reporting that their mental health has interfered with their
ability to work in the past year, with millennials (72%) the most
likely to experience this problem. Nearly half (44%) of
millennials say they worry about their personal finances often
while at work, with more than half of them (54%) saying they'd be
more productive if they were less worried.
Employee stress takes a toll on companies' bottom lines as well,
with financial stress costing employers almost $2,000 ($1,962) per
employee in lost productivity and absenteeism last year.[1]
"The levels of stress and worry in the report are troubling,
particularly among millennials, especially given the uncertain
economic times we are experiencing. The good news is that it is
clear that supporting employees through financial wellness programs
and working to get them engaged in their personal finance benefits
is likely to help boost overall employee satisfaction, retention,
and productivity," said Wayne Park,
CEO, John Hancock Retirement.
Retirement plan engagement and wellness programs can make a
difference
Survey results, in combination with John Hancock Retirement's
participant data, found that workers who engage with their
retirement plans digitally—by logging in to the plan website or
opening email communications from their plan—are more likely to
report that they're in good financial shape and on track for
retirement than their less engaged peers. The plan participant data
shows that employers that are able to engage their employees
regularly with relevant, timely information may be helping them
take financial action, including increasing their retirement
contribution rates.
In addition, employees themselves say that financial wellness
programs reduce their financial stress (82%), make them more likely
to stay with their employer (78%), and make them more productive
(70%).
However, only 3 in 10 say their employer offers a wellness
program, while 2 in 5 (41%) are unsure. The current economic
conditions represent a clear opportunity for employers to either
launch programs for their employees or make a more concerted effort
to educate them about their existing programs.
Additional key findings from the report
- Concerns about the impact of inflation on cost of living (58%),
economic conditions in general (47%), and rising interest rates
(38%) were the most frequently cited issues.
- Nearly all respondents have taken note of rising costs in the
past six months, with the vast majority reporting increased
spending on groceries (95%), household basics (91%), gas (90%), and
monthly bill payments (88%).
- The majority (71%) of respondents say they'll be focused on
growing, maintaining, or investing their savings in the coming
months, with paying off debt (44%) and planning for retirement
(45%) also frequently cited as short-term goals.
- Four in 5 (80%) employees say they're unlikely to work for a
company that doesn't offer a retirement plan.
- Fewer than 1 in 3 (31%) respondents have a formal retirement
plan, and only 1 in 3 (33%) have met with a financial advisor in
the past year.
- While roughly half (53%) of respondents feel their current
level of debt is problematic, it appears manageable for now as only
14% consider it a major problem and 61% say they've been able to
make their payments without difficulties.
- Nine in 10 employees report that learning about sources of
retirement income, projections of income, and connecting with an
advisor would encourage them to do more to prepare for
retirement.
"While offering financial wellness tools with an engaging,
personalized communication plan is something positive employers can
do for their bottom line, we like to emphasize that it also can be
a significantly positive thing to do for their employees," said
Aimee DeCamillo, head of Global
Retirement, Manulife Investment Management.
Methodology
In November 2022, John
Hancock commissioned our ninth annual stress, finances, and
well-being survey with the respected research firm Edelman Public
Relations Worldwide Canada Inc. (Edelman). An online survey of
3,825 workers was conducted between 11/29/22
and 12/14/22 to learn more about individual stress levels,
their causes and effects, and strategies for relief. John
Hancock and Edelman are not
affiliated, and neither is responsible for the liabilities of the
other.
About John Hancock Retirement
John Hancock Retirement is the U.S. retirement business of
Manulife Investment Management. For more than 50 years, we've
helped people plan and invest for retirement; today, we're one of
the largest full-service providers in the
United States.* We take a hands-on, consultative
approach based on the idea that no two plans—and no two plan
participants—are exactly alike. We partner with plan sponsors,
advisors, and third-party administrators to ensure that every plan
is personal to the participant and delivers proven results.*
As of December 31, 2022, John
Hancock serviced over 55,000 retirement plans with over 3.2 million
participants and over $187 billion in
AUMA.†
* "PLANSPONSOR 2022 Defined Contribution Recordkeeping
Survey," © 2022 Asset International, Inc., June 2022.
† As of 12/31/22, John Hancock Life Insurance
Company (U.S.A.) supported 50,882
plans, 1,586,569 participants, and
$89,537,417,404.05 in AUMA. John
Hancock Life Insurance Company of New
York supported 2,679 plans, 77,845 participants, and
$5,128,624,337.04 in AUMA. John
Hancock Retirement Plan Services LLC supported 1,879 plans,
1,633,777 participants, and $92,836,605,881.23 in AUMA. Participant counts
reflect all active participants with a balance. Approximate
unaudited figures for John Hancock, provided on a U.S. statutory
basis.
About Manulife Investment Management
Manulife Investment Management is the global brand for the
global wealth and asset management segment of Manulife Financial
Corporation. We draw on more than a century of financial
stewardship and the full resources of our parent company to serve
individuals, institutions, and retirement plan members worldwide.
Headquartered in Toronto, our
leading capabilities in public and private markets are strengthened
by an investment footprint that spans 19 geographies. We complement
these capabilities by providing access to a network of unaffiliated
asset managers from around the world. We're committed to investing
responsibly across our businesses. We develop innovative global
frameworks for sustainable investing, collaboratively engage with
companies in our securities portfolios, and maintain a high
standard of stewardship where we own and operate assets, and we
believe in supporting financial well-being through our workplace
retirement plans. Today, plan sponsors around the world rely on our
retirement plan administration and investment expertise to help
their employees plan for, save for, and live a better retirement.
Not all offerings are available in all jurisdictions. For
additional information, please visit manulifeim.com.
About Manulife
Manulife Financial Corporation is a leading international
financial services provider, helping people make their decisions
easier and lives better. With our global headquarters in
Toronto, Canada, we provide
financial advice and insurance, operating as Manulife across
Canada, Asia, and Europe, and primarily as John Hancock in
the United States. Through
Manulife Investment Management, the global brand for our Global
Wealth and Asset Management segment, we serve individuals,
institutions, and retirement plan members worldwide. At the end of
2022, we had more than 40,000 employees, over 116,000 agents, and
thousands of distribution partners, serving over 34 million
customers. We trade as "MFC" on the Toronto, New
York, and the Philippine stock exchanges and under "945" in
Hong Kong.
Not all offerings are available in all jurisdictions. For
additional information, please visit manulife.com.
John Hancock Retirement Plan Services LLC offers administrative
and/or recordkeeping services to sponsors and administrators of
retirement plans. John Hancock Trust Company LLC provides trust and
custodial services to such plans. Group annuity contracts and
recordkeeping agreements are issued by John Hancock Life Insurance
Company (U.S.A.), Boston, MA (not licensed in NY), and John
Hancock Life Insurance Company of New
York, Valhalla, NY. Product
features and availability may differ by state. Securities are
offered through John Hancock Distributors LLC, member FINRA,
SIPC.
John Hancock Investment Management Distributors LLC is the
principal underwriter and wholesale distribution broker-dealer for
the John Hancock mutual funds, member FINRA, SIPC.
NOT FDIC INSURED. MAY LOSE VALUE. NOT BANK GUARANTEED.
© 2023 John Hancock. All rights reserved.
MGR0410232834782
_______________________________
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1 This is a
hypothetical illustration used for informational purposes only
based on data from John Hancock's 2023 stress, finances, and
well-being survey. This calculator is intended to provide general
information about how much financial stress can cost a company
every year. The above calculation is based on missing 2.8
hours/year and 39.6 hours/year of lost productivity due to symptoms
of financial stress, with an assumed salary of $46.27 per hour.
Individual circumstances may vary and may not be reflective of your
situation.
|
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SOURCE John Hancock Retirement