The Hidden Value of Social Security Disability Insurance: Why It’s Important During Benefits Enrollment
The latest edition of Price Waterhouse Coopers’ Employee Financial Wellness Survey was released in April 2016. It reports on the financial well-being of adults nationwide who are full-time employees. This survey includes the views of 1,600 people.
It is no surprise that this year’s survey reveals greater worry about future financial well-being. Political uncertainty, a slow economic recovery, and wage stagnation are a few reasons that worry 52 percent of respondents in regards to their financial well-being, and 45 percent indicate stress has grown during the past 12 months.
One of the more interesting aspects of this report is the similarities of concerns regarding financial well-being across generations. Below, we’ve chosen a few of the more interesting findings.
Financial Well-Being Findings Survey
Financial Concerns
Question: What is your greatest financial concern?
Top Concern All Millennials Gen X Baby Boomers
Not having enough
emergency savings 55% 60% 56% 50%
Not being able to
retire when I want to 37% 25% 37% 45%
Not able to meet
monthly expenses 25% 35% 25% 17%
Being laid off 20% 20% 22% 16%
Not being able to
keep up with debts 15% 21% 14% 11%
Other 6% 5% 4% 10%
Paying for college 5% 4% 8% 3%
Losing my home 5% 5% 6% 4%
From the above, you can see that all generations are concerned about emergency funds. The second greatest concern for Baby Boomers (the generation closest to retirement) is the inability to retire when they want, whereas Millennials second greatest concern is meeting monthly expenses. It is interesting to note that the 2015 PwC Financial Wellness Survey found 23 percent of Millennials were concerned about not meeting monthly expenses as opposed to 35 percent in this year’s report.
Student Loans
Question: How great of an impact do student loans have on your ability to meet your other financial goals?
Significant impact Moderate impact Little impact No impact
Millennials 35% 44% 17% 5%
Gen X 31% 35% 25% 9%
Baby Boomers 51% 29% 16% 5%
Each generation found the impact of student loans to be significant. It should be noted that of those surveyed, 42 percent of Millennials, 26 percent of Gen X, and 11 percent of Baby Boomers had outstanding student loans.
Retirement
Question: Excluding home equity, how much in retirement savings do you and your spouse have saved?
Millennials Gen X Baby Boomers
Less than $50,000 63% 46% 37%
Between $50,000 and $100,000 14% 16% 13%
Between $100,000 and $200,000 9% 16% 14%
Between $200,000 and $300,000 8% 9% 12%
Between $300,000 and $500,000 2% 6% 9%
More than $500,000 4% 8% 15%
As you can see from the “Less than $50,000” category, each generation’s retirement savings concern them. Almost half of employees surveyed have saved less than $50,000. Along gender lines, 54 percent of women and 40 percent of men have not reached the $50,000 savings threshold.
Seventy-three percent of all employees are saving for retirement, but that is down from 77 percent in the 2015 PwC study.
In addition, nearly 25 percent of all employees have withdrawn money from their retirement plans.
Insurance
How well insured are the survey participants?
When it comes to disability or death, the study revealed that 47 percent of all employees are confident that their needs and their dependents’ needs for financial well-being would be met if they died or became disabled.
Life Insurance
During the year prior to the survey date, 50 percent of all employees evaluated their life insurance needs: Baby Boomers, 58 percent; Gen X, 48 percent; and Millennials, 41 percent.
Disability Insurance
All employees who are covered by disability insurance registered at 52 percent. Those covered from both (Baby Boomers and Gen X) registered at 56 percent. Millennials who are covered by disability insurance registered at 42 percent.
Three Overarching Conclusions
The highlights above are a small portion of the entire report. The authors have found three main conclusions from this year’s report. These conclusions seem obvious, but they now have supporting data.
- Added financial stress impacts employees negatively at home and at work.
- Millennials have an acute financial well-being burden.
- They likely feel more stress about finances.
- They likely experience work distractions due to financial stressors.
- Around half find it challenging to meet monthly expenses.
- They have student loans that create financial burdens.
- Employees and their financial well-being is precarious.
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