Feeling stable on retirement savings, workers still face lingering financial worries

New findings from the Employee Benefit Research Institute show that US workers continue to face considerable financial stress, particularly around retirement savings and household debt.

The data from EBRI's new report, conducted jointly with Greenwald Research, suggest that while many workers are actively contributing to retirement savings, immediate financial pressures, especially related to debt and everyday expenses, continue to weigh on their financial resilience.

While general concerns about financial well-being have decreased slightly, the 2024 Workplace Wellness Survey found that half of all surveyed employees still report moderate to high levels of financial worry, and many are leaning on retirement accounts as their primary emergency fund.

The survey, now in its fifth year, gathered responses from a national sample of 1,005 full- and part-time employees between ages 21 and 64.

Data indicate that 60 percent of workers feel their retirement savings contribute significantly to their financial stability. Employees are also heavily invested in their workplace retirement plans, with seven in 10 concerned that their employers would reduce or scrap those benefits, and almost nine in 10 saying they understand their employer's retirement benefits at least somewhat well.

However, a large proportion of respondents reported high levels of stress tied to retirement savings and debt management. About 50 percent of workers said that retirement savings cause them the most financial stress, closely followed by a lack of emergency savings. Many respondents noted their workplace retirement plan as their only source of significant emergency savings—a finding that underscores the precariousness of their financial readiness for unexpected expenses.

“Seven in 10 workers are concerned that their employers will reduce or eliminate retirement benefits, and half say that saving enough for retirement is their number one stressor,” explained Jake Spiegel, a research associate at the Employee Benefit Research Institute, in a statement Friday.

The survey data highlight that despite increased access to retirement plans and participation in them, many employees are underprepared for financial emergencies, often turning to credit or loans to cover immediate needs.

Debt remains a major burden for a large segment of the workforce, with 75 percent describing their household debt as a problem. The survey found that of those with debt, credit card obligations are the most common, with about one in four respondents reporting a credit card debt exceeding $10,000.

“While concerns about well-being have trended down during the past two years, some American workers continue to face challenges affording their basic needs,” said Greg Hershberger, managing director at Greenwald Research. “Of the three-quarters who report their level of debt is a problem, nearly eight in 10 cite problematic credit card debt.”

Essential expenses – such as groceries (cited by 52 percent of respondents), vehicle expenses (49 percent), and household utilities (36 percent) – emerged as the leading factors contributing to credit card debt. A smaller share of respondents pointed to discretionary expenses, like entertainment or travel, as drivers of their debt, suggesting that rising costs of living may be straining workers’ financial resources.

The report also examined how prepared workers feel to handle unexpected expenses. Only 46 percent said they felt ready to manage an unplanned $500 expense, and fewer were confident they could handle a $5,000 emergency.

This financial vulnerability is prompting some workers to dip into their retirement savings when faced with unexpected expenses, with about 20 percent saying they would consider withdrawing from their 401(k) or other retirement plans in those cases. Another one in three workers said they would rely on credit cards to cover these types of expenses.