Research hints at vicious mental health-wealth cycle for workers

Research hints at vicious mental health-wealth cycle for workers
New TIAA report points to two-way interplay between financial stressors and US employees’ mental health.
FEB 29, 2024

A new study from TIAA adds to the body of knowledge on financial stress and its influence on mental health.

The research – which underscores employers’ role in supporting both the mental and financial well-being of their employees – draws from a survey by the TIAA Institute, TIAA’s research arm, and High Lantern Group.

The study comes just as over 40 percent of Americans face the risk of depleting their retirement savings, according to data from the Employee Benefit Research Institute. On the mental health front, the World Health Organization says 12 percent of the global population lives with a mental health condition, yet fewer than half receive necessary services.

In its report, the TIAA Institute identified financial insecurities, such as debt and the inability to cover basic needs, as key stressors that can exacerbate mental health challenges. High amounts of debt are often associated with anxiety, depression, and anger, the institute's researchers noted.

The link between mental health and wealth goes both ways. The report’s authors said that among people experiencing mental health challenges, 93 percent felt they spent more than usual, 92 percent found it harder to make financial decisions, and 56 percent took out a loan they otherwise would not have.

They also found poor mental health can negatively impact financial decision-making, with sufferers engaging in impulsive spending or risky investments, or accumulating debt without considering the long-term consequences.

The report’s findings hint at a vicious cycle of wealth and mental health challenges, with financial difficulties lead to mental health issues, resulting in poor financial decisions, which create even more financial problems and feelings of helplessness.

"We live in a world in which greater numbers of people are increasingly struggling to create financial health. And one of the biggest drivers of mental health is a person's sense of financial stability," said Tara Giuliano, chief marketing officer at US asset manager Nuveen, which is a wholly owned subsidiary of TIAA.

The report also highlighted the cost to employers, as financial stress not only detracts from productivity but also doubles the likelihood of employee absences. Forty-two percent of US adults link their mental health issues to financial concerns, contributing to a 34 percent rise in workplace absenteeism and tardiness.

"The pandemic has heightened awareness about the prevalence of mental health challenges, with rates of poor mental health rising,” said Claire Borelli, TIAA's chief people officer. “Organizations should openly discuss mental health to help break down the stigma, and importantly take a leadership role in addressing this defining issue of our time."

AI, alts and personalization are hot trends for 2024: EY

Latest News

Roughly three-fifths of Americans agree on higher taxes for large corporations, higher-income households
Roughly three-fifths of Americans agree on higher taxes for large corporations, higher-income households

Pew survey reveals slight majority consensus on tax rates, but views splinter based on political alignment and income levels.

The Fed's going to cut rates
The Fed's going to cut rates

While the Federal Reserve's decision to hold interest rates steady in March was widely expected, it's the reactions from financial professionals that provide a more nuanced picture of the central bank's approach.

Ontario Pension Fund revamps PE business in light of global risk
Ontario Pension Fund revamps PE business in light of global risk

The pioneering member of Canada's Maple Eight is stepping back from its go-it-alone private equity approach as a drought in deals and Trump's trade war prompt a rethink.

Raymond James, RBC reel in UBS advisors managing over $690M in assets
Raymond James, RBC reel in UBS advisors managing over $690M in assets

The firms' latest additions in Florida and Nevada come as a strategic change at UBS raises risk of advisor defections.

Assetmark debuts new advisor succession planning program
Assetmark debuts new advisor succession planning program

The new program offers opportunities and events structured for rookies, next-gen advisor leaders, and soon-to-exit veterans.

SPONSORED Beyond the all-in-one: Why specialization is key in wealth tech

In an industry of broad solutions, firms like intelliflo prove 'you just need tools that play well together'

SPONSORED Record growth: Interval funds emerge as key players in alternative investments

Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies