Workers want help making these financial decisions
Decision-making fatigue—just another unexpected side effect of the pandemic. We used to just get dressed and walk out the door. That simple act is now preceded by complicated decisions about masking, vaccines, sending kids to school, and going out in public. With so much uncertainty, it’s no wonder that 82% of our retirement plan participants say they’d like to be more confident making financial decisions. And they’ve told us the types of help they need. We can’t help people decide whether they should go to the movies or stream a video at home, but we can help them make financial decisions.
Decision-making has become complicated during the pandemic
In our eighth annual survey of our retirement plan participants, we got a unique view into how people are feeling about their finances during the pandemic. Many are feeling more stressed—both general and financial stress.
Stress and financial stress have gone up in the pandemic
The once-simple routines of daily life have become complex and stressful,1 as people have to assess community spread and safety measures when they want to leave the house. Financial decisions have also become more complex, with market volatility and increasing inflation adding uncertainty to topics—such as investing and retirement planning—that many people already found intimidating. When asked what they’re most worried about affecting their finances, the number one answer was economic conditions.
Recent market volatility seen in the context of the DJIA, 2017–2021
Source: Yahoo! Finance, 2022.
Changes in inflation, 2017–2021
Source: Bureau of Labor Statistics, 1/31/2022.
Pandemic-related savings have some workers making progress
At the same time, though, workers are saying they’ve made some improvements to their finances during the pandemic. This year, more people say they’re ahead or on track for retirement and fewer say their level of debt is a problem than last year. And many workers plan to take the following steps in the next three to six months:
- Planning for retirement
- Paying off debt
- Ensuring savings are invested wisely
- Getting a better understanding of their financial situation
- Planning for healthcare costs, both now and in retirement
Working from home, delayed vacations, and going out less have given many workers a chance to start getting their finances in order. One of the few positive effects of the pandemic.
Six financial decisions people want help making
In spite of this good news, workers are still reporting increased stress, which goes back to decision-making fatigue, and they’ve made it clear they don’t want to go it alone. When they need to make a financial decision, most start by doing personal research. But they also look to financial professionals, retirement plan providers, and employers for help, and they’ve told us the topics they need help with:
2 Forecasting retirement income
4 Assessing financial wellness and gaps
5 Emergency savings
6 Saving for college
An opportunity to help people make long-term financial improvements
This presents the retirement plan industry—financial professionals, plan consultants, plan sponsors, and plan providers—with an important opportunity to help. Over the last few years, the industry has broadened our scope beyond retirement planning, recognizing that we need to enable saving by helping people manage their competing financial priorities. We use our annual survey to help us focus our efforts on the needs of participants, and this year the message is clear—workers want to improve their finances, and they’re eager for help. They’ve also told us what they want help with. Now it’s up to the industry to respond with solutions and services to help them make long-term improvements that will outlast the pandemic and enhance their financial futures.
To learn more, you may download our report here.
1 “Stress and decision-making during the pandemic,” apa.org, 10/26/21.
In August 2021, John Hancock commissioned our eighth annual financial stress survey with the respected research firm Greenwald & Associates. An online survey of 1,162 John Hancock plan participants was conducted between 8/4/21 and 9/3/21 to learn more about individual stress levels, their causes and effects, and strategies for relief. John Hancock and Greenwald & Associates are not affiliated, and neither is responsible for the liabilities of the other.
Important disclosures
John Hancock offers recordkeeping services to retirement plan clients through the following entities in the United
States: John Hancock Retirement Plan Services LLC, John Hancock Trust Company LLC, and John Hancock Life Insurance Company (U.S.A.) (not licensed in New York), 200 Berkeley Street, Boston, MA 02116. John Hancock Life Insurance Company of New York, 100 Summit Lake Drive, Valhalla, NY 10595. Securities are offered through John Hancock Distributors LLC, member FINRA, SIPC.
The content of this document is for general information only and is believed to be accurate and reliable as of the posting date, but may be subject to change. It is not intended to provide investment, tax, plan design, or legal advice (unless otherwise indicated). Please consult your own independent advisor as to any investment, tax, or legal statements made herein.
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