New John Hancock Retirement Report Reveals Surprising Contradictions in How Pandemic Is Affecting Employees

• Pandemic-era savings have boosted employees’ confidence in their financial situations and expectations for the future, even while a rising number—nearly 75%—report feeling stressed in the past year.
• Employees are eager for financial guidance and solutions from their employer.
• 66% said that having access to financial wellness programs would make them more likely to stay with their employer.

John Hancock Retirement, a company of Manulife Investment Management, announced the results of its Stress, Finances, and Well-Being report, the eighth annual survey of its retirement plan participants. As the effects of the pandemic have altered the American workforce in ways that continue to play out, this report is a snapshot of employees’ feelings about their finances and well-being as they continue to manage the impact of a lingering pandemic.

This year’s report showed participants’ confidence in their personal financial situation is at its highest level since 2018; however, they also responded that they’re seeking help in making money management decisions and showing a desire for guidance and solutions as pandemic fatigue has evolved into decision-making fatigue. This represents a chance for employers, financial professionals, and retirement providers to help retirement savers build a solid foundation for the future.

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The value in employer-sponsored retirement plans is broadly acknowledged, with almost all respondents stating that it’s a critical benefit, including 72% who said it’s very critical. What’s more, 80% of respondents said they wouldn’t be likely to work for a company that doesn’t offer a retirement plan.

“Uncertain economic times often cause people to adopt positive financial behaviors in the short term. This fact, combined with the unique situation of COVID-19 greatly reducing the opportunities to spend money, found many retirement savers in a stronger financial situation than they were prepandemic,” said Sue Reibel, CEO, John Hancock Retirement. “There’s a clear opportunity for employers to keep this momentum going by offering support to employees to help them make investment decisions with confidence, ultimately reducing their financial stress.”

In alignment with participants’ confidence in their personal financial situations, the survey found reduced levels of worry compared with last year’s report. This may be correlated to pandemic-related savings—lower commuting, entertainment, leisure, and travel expenses—which has allowed respondents to put that money to work in other areas of their financial lives. However, the 2021 report found that three in four respondents exhibit financial stress at least at a moderate level. Financial stress continues to be prevalent at work as well, with 66% saying they worry about personal finances while on the clock, with nearly half responding that they worry about it on a weekly basis.

“The takeaway of this year’s report is the paradox that we have actually seen improved savings and confidence in personal financial situations in an ongoing pandemic. However, the positive behaviors resulting in this trend have not been fully adopted by participants,” said Lynda Abend, head of strategy and transformation, John Hancock Retirement. “This environment presents a unique opportunity to help people bridge their short-term improvements into actions that will bring them sustainable, long-term financial health.”

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Openness to assistance is an opportunity to help

The opportunity for employers to help their workforce secure their financial future is a potential mitigating factor for the Great Resignation and a means to improve recruitment and retention strategies. Further, the report found that 89% said it’s important for employers to offer financial wellness programs, and 66% said that having access to financial wellness programs would make them more likely to stay with their employer.

Beyond those benefits, the report found that roughly two-thirds of respondents expressed at least moderate interest in receiving recommendations on Social Security strategies and retirement income forecasts from their employers. And 93% said receiving projections on their estimated retirement income and expenses would help them save more.

With only 37% of respondents saying they have a comprehensive financial plan for retirement, the potential impact of offering financial guidance and wellness programs is clear.

Additional key findings from the report

• 71% of participants have experienced stress, depression, or loneliness during the past year.
• A majority agree that financial concerns add stress to their life; more than 40% reported having had stress often/all of the time during the last year.
• The report found that retirement planning (cited by 47%), paying off debt (43%), and ensuring savings are invested wisely (37%) were the top priorities for participants in the coming months.
• Approximately half of the respondents feel they’ll retire around the time they planned; 20% are unsure when they’ll be able to retire.
• When it comes to retirement expenses, employees are most worried about healthcare cost, with 68% indicating that it’s at least somewhat concerning.

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