9 in 10 U.S. workers struggle with basic needs, retirement dreams fading

Nearly 9 in 10 U.S. workers are struggling meet basic living expenses, the 2024 Global Benefits Attitudes Survey from WTW found. As a result, retirement confidence has declined sharply.

“High inflation, combined with the aftermath of a once-in-a-generation pandemic, is causing many employees to feel overwhelmed and discouraged about their financial situation, which is affecting overall wellbeing,” said Mark Smrecek, senior director, retirement, for WTW.

Among the other findings of the survey of 10,000 U.S. employees:

• Nearly half of workers are extremely worried about paying for basic living costs.
• Employees ranked food (73%), health care (72%), housing (69%) and transportation (66%) as their main cost concerns.
• The number of employees who report living paycheck to paycheck climbed from 37% in 2020 to 44% this year.
• The number who said they are worse off financially compared with a year ago more than doubled from 2019 (16%) to this year (33%).
• Four in 10 employees are not on the right track with their finances, and nearly a quarter expect their financial situation to worsen over the next year.
• Nearly 6 in 10 said money concerns are having a negative impact on their overall wellbeing, resulting in missed medical appointments, higher levels of stress and anxiety, and less likelihood of meeting with friends and family.

Growing financial problems and uncertainty about inflation also are affecting retirement confidence and savings. Nearly half of workers aged 50 and older expect to work past age 70, a sharp rise from 36% two years ago and 30% before the pandemic. Additionally, 8 in 10 workers said they aren’t saving as much for retirement as they should, and only half are on the right track to retirement.

At a time when workers look to their employers for help, the survey revealed a significant gap in expectations. Further, 2 in 3 employees rank financial wellbeing as the area where they want the most support from their employers over the next three years. Although almost half want employers to help grow their savings and wealth, other WTW research found that only 1 in 4 employers ranked financial wellbeing as a top priority over the next three years.

Related: ‘Unready’ for retirement: Employee financial wellness needs and expectations in 2024

“Employer retirement programs, and specifically defined contribution plans such as 401(k)s, remain the primary path for employees to save for retirement,” said Beth Ashmore, managing director, retirement, for WTW. “With challenges meeting their day-to-day expenses while still planning for retirement, employees are looking for help from their employer to build a retirement nest egg, but they also report needing flexibility for emergencies and having a desire to maximize their benefits.”

However, there is a clear disconnect in priorities between employers and workers.

“Employers have an opportunity to align their focus with employee value, cost pressures and talent objectives to address how their benefit programs, particularly retirement and financial wellbeing initiatives can help employees juggle their finances today while being on track for retirement,” she said.