T. ROWE PRICE FINDS FINANCIAL STRESS IS A PREDICTOR OF FINANCIAL WELLNESS

Rhea-AI Summary

T. Rowe Price published research indicating that financial stress significantly impacts retirement savings. The findings show that participants stressed about debt save less for retirement. Young workers (under 30) report higher budgeting stress (73%) compared to older workers (40%). Women experience 26% more financial stress, notably regarding debt and healthcare. Black and Hispanic workers face 34% and 40% more debt-related stress, respectively. Early retirement savers score better on T. Rowe Price’s Retirement Behavior Index, underscoring the importance of financial wellness programs in enhancing retirement outcomes.

Positive

• Research indicates financial wellness programs can improve retirement savings.
• Higher Retirement Behavior Index scores among early savers suggest successful saving habits.

Negative

• Participants stressed about debt reported lower retirement savings.
• Significant financial stress disparity among younger workers and minorities.

Adoption of financial wellness programs can reduce stress, lead to better retirement outcomes

BALTIMORE , July 19, 2022 /PRNewswire/ -- T. Rowe Price, a global investment management firm and a leader in retirement, today published new research which found that financial stress is a predictor of financial wellness. Specifically, retirement plan participants who report being stressed about debt are saving less for retirement than those who are not stressed. These insights are based on T. Rowe Price's annual Retirement Savings and Spending study and analysis of its proprietary Retirement Behavior Index™, which measures people's day-to-day financial behaviors, progress made towards the financial goals they set for themselves and how, ultimately, how today's actions may affect their future retirement.

"The path to a successful retirement is paved by financial wellness," said Joshua Dietch, head of retirement thought leadership at T. Rowe Price. "Employers, financial professionals, consultants, and recordkeepers are uniquely positioned to encourage the promotion and adoption of financial wellness programs which can reduce financial stress and lead to greater savings and better participant retirement outcomes."

The study's analysis of financial stress included an assessment of factors like stress emanating from debt, budgeting, retirement and nonretirement savings, managing investments and health care costs. Additional findings from the research include:

• Debt, particularly unsecured debt, correlates with financial stress
• Seventy-three percent of younger workers (30 years old and below) reported moderate to high levels of stress related to budgeting compared to 40% of older workers (50 years old and above)
• Women are 26% more likely than men to experience higher levels of financial stress, particularly as it relates to debt, budgeting, nonretirement savings, and health care expenses
• Black and Hispanic workers are 34% and 40% more likely than white workers to experience higher levels of debt-related stress
• Workers who start saving for retirement early in their working years have higher Retirement Behavior Index™ scores, T. Rowe Price's proprietary financial wellness framework, than those who start saving later in their working years

ABOUT T. ROWE PRICE
Founded in 1937, T. Rowe Price (NASDAQ-GS: TROW) is an independent global asset management company with $1.31 trillion in assets under management as of June 30, 2022. The firm is focused on delivering investment excellence and retirement services for institutional, intermediary, and individual investors. Our strategic investing approach, driven by independent thinking and guided by rigorous research, helps clients feel confident in pursuing financial goals. For more information, visit troweprice.com, Twitter, YouTube, LinkedIn, Instagram, or Facebook.

View original content:https://www.prnewswire.com/news-releases/t-rowe-price-finds-financial-stress-is-a-predictor-of-financial-wellness-301588986.html

SOURCE T. Rowe Price Group, Inc.

FAQ

What did TROW report about financial stress in July 2022?

TROW reported that financial stress significantly impacts retirement savings, with stressed participants saving less.

How does financial stress vary among different demographics according to TROW's research?

According to TROW, younger workers report higher budgeting stress, and women, as well as Black and Hispanic workers, experience more debt-related financial stress.

What is the Retirement Behavior Index mentioned by TROW?

The Retirement Behavior Index is T. Rowe Price's proprietary framework measuring individuals' financial behaviors and their progress towards retirement goals.

What findings were noted about early retirement savers in TROW's research?

TROW found that workers who start saving early have higher scores on the Retirement Behavior Index, indicating better financial habits.

What recommendations did TROW make regarding financial wellness?

TROW recommends promoting financial wellness programs to reduce stress and improve retirement outcomes for participants.