Employee financial wellbeing has climbed to its highest level in four years, but most workers continue to struggle with inflation and rising living costs, according to Bank of America’s 2026 Workplace Benefits Report.
The study found 55% of employees now rate their financial wellbeing positively, up 11 percentage points since 2023. Despite that improvement, 75% say the cost of living threatens their financial security, while 76% cite the economy and 62% point to inflation as major financial stressors.
Retirement Confidence Improves
Retirement remains employees’ top financial priority, with 70% naming it as a key goal. Confidence is also rising, as 73% believe they are on track with retirement savings, up six percentage points from last year.
The report also found Gen Z is starting to save much earlier, beginning retirement contributions at an average age of 24 compared with age 34 for Baby Boomers.
Employees are also making progress on short-term finances. Sixty percent say they have reached their emergency savings goal, while the share carrying credit card debt fell to 45%, down 11 percentage points year over year.
Employers Misjudge Financial Stress
The report found a disconnect between employers and employees. While 71% of employers believe their workforce has good or excellent financial wellbeing, only 55% of employees say the same.
Nearly one-third of workers also said access to personalized financial advice for debt management would be valuable.
Benefits Help Retain Workers
Workplace benefits continue to influence retention in a competitive labor market.
More than one-third of employees said they have left or considered leaving a job during the past year, while 39% said competitive benefits are a key reason they remain with their current employer. Nearly half of employers that successfully recruited top talent credited their benefits offerings.
Although 87% of employers now use AI in some capacity, only 52% apply it to benefits administration and just 35% use it to monitor employee engagement with benefits, suggesting many organizations have yet to use the technology to improve workplace financial support.
