Retirement plans being used for immediate needs not for savings

By Personal FinanceFOXBusiness

(Reuters)

Despite the U.S. unemployment rate falling and workers finding a little extra in their paychecks, thanks to tax reform, employees still aren’t confident about reaching their long term goals.

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That is the finding of the PwC US’s 2018 Employee Financial Wellness Survey.

Less than half are confident they’ll be able to retire when they want, and nearly two-thirds either say their retirement plans and Social Security won’t be sufficient to support them in retirement or they aren’t sure.

Forty-two percent say it’s likely they’ll need to use money held in retirement plans for other expenses.

That number is much higher among employees who are stressed about their finances or impacted by student loans.

Healthcare is becoming a bigger concern in decision making.

Employees are stressing over uncertainty regarding healthcare and are pressed to support both aging parents and adult children.

For the first time, this survey’s results find that among Baby Boomers’ reasons for delaying retirement, needing to keep healthcare coverage is a more popular choice than simply not wanting to retire.

A growing number of employees, now more than one in five, would be willing to sacrifice future pay increases for better healthcare benefits.

The survey also looked at the financial burden faced by employees who support their adult children.

42% provide financial support to their adult children and more than half are willing to sacrifice their own financial well-being to do so.

“We counsel increasing numbers of younger employees who are experiencing the financial impact of helping their aging parents navigate often overwhelming healthcare expenses, just as these younger employees are wrestling with their own financial challenges,” said Kent E. Allison, leader of PwC’s Employee Financial Education & Wellness practice. “Employees caught in the middle supporting both their parents and their adult children may find themselves in a particularly precarious position, unable to provide for their own financial well-being.”

When asked what causes them the most stress in their lives, nearly twice as many employees say financial matters as compared to job stress.

PwC’s Employee Financial Wellness Survey tracks the financial and retirement well-being of working US adults incorporating the views of 1,600 full-time employees.