EY releases latest Financial Wellness Assessment analysis

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Dec 06, 2016, 10:22 ET

NEW YORK, Dec. 6, 2016 /PRNewswire/ -- Today's release of the EY Financial Wellness Assessment provides a look at the financial well-being of full-time employed U.S. adults nationwide.

The data reflects assessments of more than 4,000 respondents ranging in age from 18 – 65+, taken between August and October 2016. Respondents are employees of primarily large corporations and large non-profit organizations covering a wide variety of industries.

RETIREMENT PICTURE

Retirement continues to be on the minds of employees and only 37% said they are confident they are on the right track for a comfortable retirement. Fifty-one percent agree that they spend time worrying about their financial situation.

When asked about the last time they tried to determine how much they would need for retirement, 41% reported estimating their needs within the last 12 months. Responses among specific age groups vary. Up 9% (58%) from the previous assessment just this past September, 67% of those just starting out (18–25 year olds) said they have never thought about retirement planning. Thirty-three percent of those over 50 said they had never tried to determine how much they would need to comfortably retire.

Regardless of having a plan, eighty-six percent contributed at least 4% of their salary to retirement savings plans such as a 401(k), 403(b) or another type of workforce retirement plan. Yet 14% are contributing less than 4% which indicates they may not be receiving their full company match.

When it came to how that money was invested, 69% said they had some portion of their retirement account in cash-type investments (e.g., money market accounts, stable value funds, etc.). Fifty-one percent said they were not likely to sell stock investments and invest their money in safer investments during a market downturn.

Sixty percent of respondents stated they do not have a will and, of those who do, 41% have reviewed it in the last year. About half (51%) feel they have an appropriate amount of life insurance.

TRENDING ON DEBT

When asked to think about assets, debt, savings and how satisfied respondents were with their personal financial situation overall, 41% were satisfied. Thirty-five percent of 18 to 25 year olds felt unsatisfied with their current financial situation. Half (50%) of those aged 50-64 stated they were satisfied with their financial situation, the most satisfied of all the age ranges.

Seventy-one percent of respondents have never paid a bill late. When asked how many times over the past 12 months they had paid a bill past its due date, 20% said they submitted late payments once or twice.

Overall 74% agreed their current debt was manageable, with 9% stating they had no debt at all, up 2% from September. Even 66% of those just beginning their careers or just out of college (18-25 year olds) said their debt was manageable and, of those who are over 50, almost 80% (77%) agreed.

DAILY EXPENSES

Ninety percent of assessment respondents say that their household spending was either less than or equal to their household income. This shows a conscious effort across all generations to effectively manage their cash flow, and having a plan on where to best use the surplus they have will be key to improving their financial health.

Eighty-seven percent were confident they would be able to come up with $2,000 if an unexpected need arose within the next month. Of those who are 65+ nearly 95% stated they could come up with $2,000 as well as 80% of 18-25 year olds (up 4% from the last assessment period). Fifty-two percent overall believed they could maintain their minimum standard of living in the event of a 6-month absence from the workforce due to medical issues.

Of the employees who consistently use credit cards, 63% said they pay the balance in full each month which is down from 66% in February; 28% pay more than the minimum due (25% in February); the remaining 6% of working credit card users only pay the minimum. Three percent don't use credit cards at all.

About Ernst & Young LLP's Employee Financial Services practice

Ernst & Young LLP's Employee Financial Services practice (EFS) is a trusted provider for independent, objective employee financial education and counseling. Our multi-channel approach integrates benefits programs to help employees meet their personal financial goals across career and life stages. To learn how we can help you manage fiduciary risk, deliver positive ROI on your benefits programs, and improve employee confidence and financial well-being visit www.ey.com/efs.

Any investment services provided by Ernst & Young LLP employees are performed under the supervision of Ernst & Young Investment Advisers LLP ("EYIA").

Additional information about EYIA is available on the SEC's website at: http://www.adviserinfo.sec.gov/IAPD/Content/IapdMain/iapd_SiteMap.aspx.

About EY

EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.

This news release has been issued by Ernst & Young LLP, a member firm of EY serving clients in the US.

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