The company said nearly 60% of questions received by its financial planners were on long-term planning issues in the second quarter versus 48% last year. Additionally, over 25% of employees’ questions were specifically about retirement planning, up from 20% in Q2 2010.
However, as employees are shifting their focus to retirement planning, they are realizing just how far behind they are. Only 14% of employees said they felt confident they were on track to replace at least 80% of their income in retirement despite the fact that employee participation in company-sponsored retirement plans increased six percentage points to 91%, up from 85% this time last year.
Financial Finesse said it believes the decline in the percentage of employees reporting they are prepared for retirement is actually a positive sign that a nationwide retirement crisis can be avoided because employees are coming out of denial and taking the steps needed to fix the problem.
The Trends in Employee Financial Issues Q2 2011 report also shows employees are sustaining, and in some cases building upon, improvements in their finances, a trend the company has seen since late 2009 when employees started to take more control of their finances in response to the recession.
In the first two quarters of 2011:
- 71% of employees reported having a handle on their cash flow vs. 64% in 2010
- 88% reported paying bills on time, up from 82% in 2010
- 53% reported having an emergency fund in place vs. 48% in 2010
- 57% reported regularly paying off credit card balances, up from 51% in 2010