Most employees feel good about their retirement savings, but rising day-to-day expenses can create enough stress to affect workplace productivity. To attract and retain top talent, employers should consider these financial challenges when updating benefits for 2025.

Anxiety Rises Over Living Expenses

Despite its recent cooling, inflation’s impact on the cost of living is the top stressor. Additional leading worries include credit card debt, housing, and medical bills.

To cover emergency expenses, 54% of employees are dipping into their retirement savings. This problem is worsened by the lack of emergency funds—only 25% of financially unstable employees have them, compared to 82% of those who are financially stable.

There’s also a contrast between retirement confidence and readiness. While 72% feel somewhat optimistic about retiring, just 38% expect to have the $500,000 in savings that 56% believe they need. Additionally, retirement savings goal estimates vary wildly, with 21% thinking they need less than $100,000 to retire. Employees need more financial education and tools to meet near- and long-term money targets.

Money Worries Hurt Mental Health, Work Performance

Finances cause moderate to significant anxiety for 62%, up since 2023. This takes a toll at work – 51% say money stress makes it difficult to focus and perform. Nearly 1 in 5 say it impacts their work ability “all the time,” signaling an urgent issue for employers to address.

Demand Rises for Financial Benefits

With current financial realities, employers must prioritize financial wellness benefits that provide holistic support. The top desired offerings are:

• 401(k) benefits: 40% seek access to retirement plans. Of those with this benefit, 55% want higher employer matches.
• Emergency savings: 40% want employer-sponsored emergency funds.
• Wellness and financial aid: 33% seek wellness stipends, 29% want FSAs or HSAs amid rising living costs.
• Tools and advice: 24% want budgeting tools and 21% seek access to financial advisors.
• Education benefits: 18% want student loan assistance/repayment. Another 18% like 401(k) match programs that also make student loan payments.

Workers aren’t viewing these lightly – they’re willing to leave for companies that provide such offerings.

For more ways to attract top talent in 2025, or additional Employee Benefits resouces, contact INSURICA today.

Copyright © 2025 Smarts Publishing. This is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.