‘Holistic’ financial wellness: New approach to help bridge the gender, income, generation gaps

While the number of American workers who report feeling financially well has trended up since mid-2023 (47% vs. 42%), a new Bank of America report shows that financial wellness varies across different generations, income levels, ethnicities and industries.

BofA released the second annual Workplace Benefits Report, Inspiring Inclusive Financial Wellbeing in the Workplace, which dives deeper into financial challenges across today’s diverse workforce. The report, which is based on a nationwide survey of nearly 1,000 employees and more than 800 employers, offers actionable insights for employers to better understand and support today’s diverse workforce.

Feelings of financial stress varies 

“Though employees are feeling more financially well compared to last year, we saw that about 2 in 3 still feel stressed about their finances,” said Lisa Margeson, Managing Director, Retirement Research and Insights Group at Bank of America Workplace Benefits. “Employees with lower incomes (21%), Hispanic employees (35%), and younger employees (36%) tend to feel the most stressed.”

Two out of three employees feel stressed about their finances, with Hispanic and employees making less than $75,000 annual feeling the most stressed (78%). Asian employees report the highest financial well-being (58%) along with employees making more than $150,000 (66%).

While saving for retirement is the top-ranked financial goal for employees overall, young, lower income and employees in the health care and social assistance sectors rank paying off credit card debt as their top financial goal.

The gender gap widens

Women continue to share greater concern about their personal finances and the economy. Although 66% of employees feel stressed about their finances, that number is higher among women at 74%. Additionally, women are still lagging behind men in feelings of financial wellness (36% vs. 53%) and overall economic optimism (47% vs. 58%).

“We did see a big gap between men and women when it came to financial wellness – 58% of men feel financially well, only 36% of women feel financially well,” said Margeson. “There are likely several factors at play, including that there is still a pay gap today, which impacts current finances, as well as the ability to save for the future. And when you think about a woman’s life – and career – journey versus a man, it’s different.

“Often caregiving responsibility impacts earnings and savings, which can further impact future retirement income – from savings to Social Security, thereby creating a wealth gap over the course of a woman’s life. And with women tending to live on average longer than men, they need to plan for longer lives. With some of these headwinds, it’s not surprising there is a gender gap when assessing feelings of financial wellness.”

Less than half of employers offer financial wellness

While 95% of employers feel responsible for their employees’ financial wellness, only 44% offer financial wellness programs. “Not only is it the right thing to do, to support employees in managing their current finances, but also provide resources to help them to save for their future,” said Margeson. “And benefits offered by employers – from retirement savings options to other financial wellness resources – continue to matter to employees when making decisions about where to work.

“Employers should continue to prioritize these benefits in order to retain and attract top talent. Helping employees thrive financially can also help businesses thrive, as employees who feel physically, emotionally and financially well are often more productive at work, which leads to a higher ROI.”

Related: New playbook helps employers roll out a successful financial wellness program

However, even when offered, less than half of employers formally review the success of their programs. “There are several ways to measure success of these programs,” said Margeson. “It’s critical to talk to – and listen – to your employees, so it was great to see that most employers say they use employee surveys to determine if these programs are being used and valued, and what they say would help them for resources. Many also measure by employee engagement with key components of a solid financial plan, such as saving in their 401(k) and HSA plans.”