Most Americans feel more financially secure because of the financial and insurance benefits they receive through their employer, according to a study by Massachusetts Mutual Life Insurance Co. (MassMutual).
However, this perspective changes depending on the income level of workers. Fifty-eight percent of middle-income workers and 65 percent of upper middle-income workers say they feel more secure because of benefits from their employer. Only 42 percent of lower-income workers reported feeling the same security. A lack of financial education among workers may be contributing to lower levels of confidence.
Individuals who report feeling less financially secure are less likely to have access to benefits such as a 401(k) or other retirement savings vehicles, or life, disability, accident or dental insurance, according to the report.
Workers desire more support and education when it comes to managing their finances. In fact, half of all respondents said they would welcome guidance on personal finances from their employer and 51 percent said they would like their employer to provide more information about retirement savings. Seven in 10 millennials said they would welcome financial planning assistance and six in 10 would be interested in budgeting assistance. Despite worker interest in financial planning, only one in four employees have been offered some form of financial education in the workplace, the study finds.
“MassMutual’s study indicates that there may be a knowledge gap in the understanding and use of employee benefits among certain employee populations,” said Jon Shuman, leader of MassMutual’s Voluntary Benefits unit. “More lower- and middle-income workers are likely to say that they wish their employer did more to help them set financial priorities than upper-middle-income workers.”
Employees are interested in their benefits and how to protect their finances in emergencies. Workers showed the highest level of interest in specific benefits including disability insurance (78 percent), continuing retirement contributions while disabled (74 percent), insurance for critical illness (74 percent), accident insurance (67 percent), and low cost emergency loans (57 percent) among all income levels.
“While workplace benefits can help employees feel more financially secure, each employee’s personal financial situation is unique,” Shuman said. “Employers and brokers can help through education and make a wide range of benefits available on a voluntary or employee-paid basis to meet as many individual financial needs as possible.”
As a result of the need for financial education in the workplace, MassMutual is making an effort to increase benefits education among its employees. MassMutual is currently training retirement education specialists who will educate their workforce on how their insurance benefits can help protect household finances, strengthen their retirement security, and safeguard individual financial security. MassMutual currently offers critical illness, accident, disability and life insurance at the workplace.
The MassMutual Workplace Benefits Study polled 1,010 working Americans ages 25-65 with annual household incomes between $35,000 and $150,000 who actively participated in making household financial decisions. The internet-based research was conducted by Greenwald & Associates on behalf of MassMutual.
“While workplace benefits can help employees feel more financially secure, each employee’s personal financial situation is unique,” Shuman said. “Employers and brokers can help through education and make a wide range of benefits available on a voluntary or employee-paid basis to meet as many individual financial needs as possible.”