BofA Study: Percentage of American Workers Feeling Financially Well Rises to 47%

Rhea-AI Summary

Bank of America's 2024 Workplace Benefits Report reveals an increase in the financial wellness of American workers, with 47% feeling financially well compared to 42% last year. The report, based on surveys of nearly 1,000 employees and over 800 employers, highlights concerns about economic uncertainty, inflation, and retirement savings.

Key findings include a significant gender gap in financial wellness, with 53% of men feeling financially well versus 36% of women. Additionally, 76% of workers feel that the cost of living is outpacing their salary growth. Despite these concerns, job loyalty remains high, with 70% intending to stay in their jobs for the next year.

Other insights show proactive steps by employees to improve financial wellness, a growing interest in debt assistance benefits, and a need for better communication about caregiver support. Pay equity and wellness reimbursements also emerge as important trends in employee benefits.

Positive

• Financial wellness of American workers increased to 47% from 42%.
• Economic uncertainty concerns for long-term retirement savings decreased to 53% from 63%.
• 70% of employees plan to stay in their jobs for the next year.
• Employees are proactively limiting expenses (62%), paying down debt (43%), and adding to emergency funds (41%).
• Pay equity initiatives improve talent attraction, with 78% of employers reporting success.
• 33% of employees are now prioritizing long-term retirement savings, up from 31% in 2023.
• 37% of employers offer student loan repayment assistance.
• 48% of employees want Lifestyle Spending Accounts (LSA) for wellness expenses.

Negative

• Financial wellness gender gap widened: 53% of men vs 36% of women feel financially well.
• 76% of workers say the cost of living outpaces their salary growth, up from 67%.
• 61% of caregivers are unaware of available support from employers.
• Only 7% of employees estimate their retirement health expenses accurately, indicating a potential disconnect.
• Only 44% of employers address pay equity.
• Only 29% of employers offer Lifestyle Spending Accounts (LSA), despite high demand.

2024 Workplace Benefits Report finds financial wellness gender gap widening and greater concern over cost-of-living increases

CHARLOTTE, N.C., May 21, 2024 /PRNewswire/ -- Today, 47% of American workers feel financially well, up from 42% at this time last year. This is according to Bank of America's 14th annual Workplace Benefits Report, "The Resurging Workforce." Conducted in partnership with Bank of America Institute, the report also found that 53% of employees are concerned that economic uncertainty will affect their long-term retirement savings, down from 63% in 2023.

Meanwhile, the gap in financial wellness between men and women continues to grow, with 53% of men reporting good financial wellness compared to 36% of women. In addition, employees expressed concern about inflation, with 76% of workers saying that the cost of living is outpacing growth in their salary or wages, compared to 67% in June 2023.

"Despite concerns about the cost of living and plans to limit expenses, more employees are feeling confident about their financial well-being," said Lorna Sabbia, Head of Workplace Benefits at Bank of America. "However, there is still work to be done to address gender equity, as women continue to report much lower financial wellness scores than men."

Based on nationwide surveys of nearly 1,000 employees and more than 800 employers, the report analyzed employee financial well-being and retirement preparedness, the state of the workplace, benefits trends and more.

Key Insights:

• 6 in 10 workers are limiting current expenses. Many employees say they are taking proactive steps to improve their financial wellness, including limiting expenses (62%), paying down debt (43%) and adding to emergency funds (41%).
• Job loyalty remains high. 70% of employees plan to keep their jobs for the next year, with good work/life balance as the top reason employees want to stay (66%). Of those who plan to leave, compensation (52%) was the top reason for the switch, followed by career growth (45%).
• Pay equity is becoming a powerful recruitment tool. Only 44% of employers currently address pay equity. However, those with pay equity initiatives in place notice an impact, with 78% reporting an improvement in attracting top talent vs. 50% without such initiatives.
• There's a potential disconnect in retirement health care expenses. Most Americans drastically underestimate the cost of health care in retirement. Current research ^[1] shows that a retired 65-year-old couple could need more than $350,000 in savings to cover their retirement health care expenses. However, according to this new Bank of America report, only 7% of employees think their yearly health expenses in retirement could total even $10,000.

Additional Findings:

• There's a divide between working caregivers and employers. While most employers (81%) say they offer support to caregivers, 61% of caregivers are not aware of available support. This is significant, considering a little more than half of the employees (52%) we surveyed identify as caregivers, and 49% of caregivers are not comfortable self-identifying to their employers.
• American workers are beginning to re-prioritize retirement savings. The number of employees prioritizing long-term retirement savings is slowly trending upwards (33% today, up from 31% in 2023). This has become their top financial goal, overtaking those focused on short-term financial needs last year.
• Debt assistance is emerging as an attractive benefit. Employers are starting to explore ways they can support employees with debt, with 37% now offering student loan repayment assistance.
• Wellness reimbursements are becoming a new benefit trend. According to the data, 48% of employees want their company to offer a Lifestyle Spending Account (LSA), which can help employees pay for a range of wellness expenses and encourage healthy behaviors. Examples of qualified expenses may include gym memberships, mediation classes and camping supplies. However, only 29% of employers currently offer an LSA.

More findings, including actionable steps for employers, are available in the Bank of America 2024 Workplace Benefits Report.

Workplace Benefits Report Methodology
Escalent surveyed a national sample of 955 employees who are working full-time and participate in 401(k) plans, and 804 employers who offer both a 401(k) plan and have sole or shared responsibility for decisions made in the plan. The survey was conducted between November 22, 2023, and January 4, 2024. To qualify for the survey, employees had to be current participants of a 401(k) plan and employers had to offer a 401(k) plan option. Neither was required to work with Bank of America. Bank of America was not identified as the sponsor of the study.

About Bank of America Institute
Bank of America Institute is dedicated to uncovering powerful insights that move business and society forward. Established in 2022, the Institute is a think tank that draws on data and analyses from across the bank and the world to provide timely and original perspectives on the economy, sustainability, and global transformation. The Institute leverages the depth and breadth of the bank's proprietary data, from approximately 68 million consumer and small business clients, 56 million verified digital users, $4.2 trillion in total payments in 2022 and $1.4 trillion in consumer and wealth management deposits. From this robust data set, the Institute provides a unique perspective on the health of the economy. It also elevates thought leadership from throughout the bank that addresses long-term trends and shares these findings with the general public.

Bank of America
Bank of America is one of the world's leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 69 million consumer and small business clients with approximately 3,800 retail financial centers, approximately 15,000 ATMs (automated teller machines) and award-winning digital banking with approximately 57 million verified digital users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business households through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and more than 35 countries. Bank of America Corporation stock is listed on the New York Stock Exchange (NYSE: BAC).

Bank of America is a marketing name for the Retirement Services business of Bank of America Corporation ("BofA Corp."). Banking activities may be performed by wholly owned banking affiliates of BofA Corp., including Bank of America, N.A., Member FDIC. Brokerage and Investment advisory services are provided by wholly owned non-bank affiliates of BofA Corp., including MLPF&S, a dually registered broker-dealer and investment adviser and Member SIPC. 

Investment products: 

Are Not FDIC Insured

Are Not Bank Guaranteed

May Lose Value

© 2024 Bank of America Corporation. All rights reserved. MAP6629795

Reporters may contact:

Don Vecchiarello, Bank of America
Phone: 1.980.387.4899
don.vecchiarello@bofa.com

¹ Employee Benefits Research Institute, Issue Brief no. 599, January 18, 2024.

 

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SOURCE Bank of America Corporation

FAQ

What is the percentage of American workers feeling financially well in 2024 according to Bank of America?

47% of American workers feel financially well in 2024, up from 42% last year.

What is the gender gap in financial wellness according to BAC's 2024 report?

53% of men feel financially well compared to 36% of women, indicating a growing gender gap.

How many workers are concerned about cost-of-living increases according to BAC's report?

76% of workers are concerned that the cost of living is outpacing their salary or wage growth.

What percentage of employees plans to stay in their jobs next year according to BAC?

70% of employees plan to keep their jobs for the next year.

What proactive steps are employees taking to improve financial wellness according to BAC?

Employees are limiting expenses (62%), paying down debt (43%), and adding to emergency funds (41%).

How many employers currently address pay equity according to BAC's 2024 report?

Only 44% of employers currently address pay equity.

What is the potential disconnect in retirement health care expenses noted in BAC's report?

Most Americans underestimate retirement health care costs, with only 7% estimating their yearly expenses accurately.

How many employers offer student loan repayment assistance according to BAC?

37% of employers now offer student loan repayment assistance.

What percentage of employees want a Lifestyle Spending Account (LSA) according to BAC's report?

48% of employees want their company to offer a Lifestyle Spending Account (LSA).

How aware are caregivers of the available support from employers according to BAC?

61% of caregivers are not aware of the support available to them from employers.