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The Principal Financial Well-Being IndexSM - Summary
1st Quarter 2012

This Principal Financial Well-Being IndexSM survey was conducted online within the United States by Harris Interactive on behalf of the Principal Financial Group® between January 30th and February 6th, 2012 among 1,109 employees. This is one in a series of quarterly studies to identify and track changes in the workplace of small and mid-sized (growing) businesses. The first Principal Financial Well-Being IndexSM survey was conducted in the United States in 2000.

Employees consisted of adults 18+ who work at small and mid-sized (SMB) U.S. businesses (firm size 10-1,000 employees). Results were weighted as needed for age by gender, education, race/ethnicity, region and household income. Propensity score weighting was also used to adjust for respondents' propensity to be online.

All sample surveys and polls, whether or not they use probability sampling, are subject to multiple sources of error which are most often not possible to quantify or estimate, including sampling error, coverage error, error associated with nonresponse, error associated with question wording and response options, and post-survey weighting and adjustments. Therefore, Harris Interactive avoids the words "margin of error" as they are misleading. All that can be calculated are different possible sampling errors with different probabilities for pure, unweighted, random samples with 100 percent response rates. These are only theoretical because no published polls come close to this ideal.

Respondents for this survey were selected from among those who have agreed to participate in Harris Interactive surveys. The data have been weighted to reflect the composition of the entire population of adult employees working for small to mid-sized U.S. businesses. Because the sample is based on those who agreed to be invited to participate in the Harris Interactive online research panel, no estimates of theoretical sampling error can be calculated.

Download the full report (PDF: 219 KB) - includes all questions and data

Featured Key Findings

  • Financial Well Being
    • Consistent with 4th quarter 2011, two-thirds of employees (67%) are very concerned about their long-term financial future.
    • A third of employees (32%) are extremely happy about their current financial well-being.
      • Employees who use a financial professional for financial advice, guidance, and/or products for a fee or commission are significantly more likely to report they are extremely happy with their current financial well-being (43%) than employees who do not use a financial advisor (28%).
    • Just over a quarter of employees (28%) have not yet planned for retirement savings/security.
      • Employees who do not use a financial professional are significantly more likely to have not yet planned for retirement savings/security (32%) than employees who do use a financial professional (12%).
  • Economic Outlook
    • When asked how they would describe their sentiment regarding the economic outlook for 2012, over two out of five employees (44%) selected "cautious", while a quarter (27%, up significantly from 12% in 3rd quarter 2011) chose "optimistic".
    • Up significantly from last quarter, about two out of five employees (39%, up from 25%) think the economy will improve to some extent in the next year.
    • The majority of employees (51%) think their personal financial situation is about the same as it was this same time last year (27% think it has improved and 22% think it has worsened to some extent).
    • For two out of five employees (41%), the economy is causing them to hold off on making any long-term financial commitments.
    • Over a third of employees (37%) plan to be more involved in the upcoming presidential election than in past elections given the current state of the economy, this is particularly the case for males (41% of males; 32% of females).
  • Financial Dreams
    • Forty-three percent of employees (up from 33% last quarter) have some level of confidence in their ability to achieve their dreams for their financial future, with male employees being more likely to be confident than females (49% males; 36% females).
    • Employees' top financial dreams include financial security (23%), financial security in retirement (20%) and being debt free (12%).
  • Retirement Savings and Readiness
    • Approximately half of employees (51%) are aware of the amount of money they will need in order to be comfortable in retirement.
      • Employees who use a financial professional (61%) are more likely than employees who do not use a financial professional (47%) to indicate they are aware of the amount of money they need in order to be comfortable in retirement.
      • Baby Boomers (57%) are the generation most likely to agree that they are aware of the amount of money they will need in order to be comfortable in retirement.
      • Males (57%) are more likely than females (44%) to report being aware of the amount of money they will need in order to be comfortable in retirement.
    • Only 35% of employees agree that they are saving enough money in order to live comfortably in retirement.
      • About half of employees (52%) who use a financial professional believe they are saving enough money in order to live comfortably in retirement, compared to just over a quarter of employees (29%) who do not use a financial professional.
  • Income Tax Refunds
    • Among employees who have an idea if they will receive a federal or state tax refund for 2011, over three-quarters (77%) expect to receive a refund.
    • Employees' plans for their refund include saving or investing the refund (44%) or paying down/off short-term debts (37%) or longer-term debts (25%).
  • Financial Advisor Usage
    • Approximately a quarter of employees (24%) indicate they use a financial professional who provides them financial advice, guidance, and/or products for a fee or commission.
      • Employees in households with $125,000 to $199,999 or $200,000+ in income are significantly more likely to use a financial professional (37%, 48% respectively) than employees in households who make $74,999 or less (range is 8% - 23% depending on household income category.
    • The majority of employees (77%) who work with a financial professional just work with one financial professional.
    • One in five employees (21%) who do not currently use a financial professional think they would need $100,000 or more in savings or investments in order to feel comfortable using a professional for financial advice or guidance.
  • Employee Benefits Employees continue to rate health insurance as the most important benefit, followed by defined contribution retirement plans and dental insurance. Health insurance is the benefit most employees would like to see improved, while defined benefit plans is the benefit most employees would like to see their employer offer.
  • Disability Income Insurance
    • Nearly three-fourths of employees (72%) rated the emotional impact of becoming disabled and not being able to work for a living as at least an 8 on a 10 point scale in which a 10 means "devastated."
    • Just over one in five employees (22%) own disability insurance.
    • The most common reasons employees do not own disability income insurance, both selected by a third of employees are cost in that it’s too expensive to purchase this type of insurance and being covered by disability insurance through their employer.
  • Voluntary Benefits at the Workplace
    • The top voluntary benefits offered are dental (48%), vision (38%), short-term disability (35%) and long-term disability (31%).  These same voluntary benefits are the most commonly purchased voluntary benefits.
    • Overall, 57% of employees who are offered voluntary benefits at work have purchased at least one of those benefits offered.
    • Two thirds of employees (69%) rated their confidence in making voluntary benefit decisions with the amount of education provided by their employer as confident, very confident or extremely confident.
    • Employees seem satisfied with the voluntary benefits package offered by their employer as over half of employees (55%) with voluntary benefits are either satisfied (45%) or very satisfied (11%) overall with their employer's voluntary benefit offering.

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