Employees’ 401(k) accounts may have taken a hit during recent market volatility, but that’s not the only reason balances may be down.
A new study from Morgan Stanley finds 62% of employees have reduced their short- and long-term savings contributions amid high inflation and concerns about a possible recession.
Almost one-third of respondents reduced contributions to their 401(k) plans. Meanwhile, 26% said they’ve cut back on paying down debts, 25% reduced their long-term savings, 24% scaled back emergency and short-term savings, 19% whittled down contributions to health savings accounts and 13% reduced contributions to a college savings fund.
In addition, 71% of employees said money-related stress has negatively affected their work and personal lives, a 7% increase from 2021. At the same time, 84% of human resources leaders said they’re worried personal financial issues are affecting employees’ productivity.
The online survey was conducted between July 13 and 19 and included 1,000 employed adults and 600 human resources leaders.