Employees are more satisfied with their salaries than they’ve been in a couple years. Yet there’s been a big jump in workers taking hardship withdrawals from their 401(k) accounts.
Two recent reports provide a snapshot of the wide divergence in the financial condition of American workers.
A Gallup poll says 53% of employees feel they’re “paid about right.” The number that felt that way two years ago? Just 46%.
This year, 43% think they’re underpaid. In 2008, that number was 51%.
What’s more, Gallup says, 31% of employees say they’re “completely satisfied” with what they earn — which matches the record high set in 2006.
On the other hand …
Now here’s the dark side. Fidelity Investments issued a report saying the number of employees taking hardship withdrawals from their 401(k) plans has reached a 10-year high.
What’s worse: 45% of those taking the hardship funds also did so last year.
The top reasons for the withdrawals: to prevent foreclosure or eviction, cover college expenses and home purchases. The IRS also allows the hardship withdrawals for such things as medical bills and burial and funeral expenses.
One final key statistic: The average age of those taking a 401(k) plan loan or hardship withdrawal is between 35 and 55 — peak earning years, but a period when employees often have to juggle multiple financial challenges.
Long way to go
So what’s it all mean? The seeming contradiction in the two reports likely means the so-called recovery isn’t as far-reaching as it needs to be.
We’ve come some distance from the financial meltdown, but there’s clearly a bunch of people — and organizations — still hurting.
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