Employees are sustaining, and in some cases building upon, improvements in their finances, according to the most recent Financial Finesse quarterly report.

The report, which tracks patterns in employees’ financial questions and self-reported priorities and challenges, underscored some key economic and financial trends that employees and their employers should be aware of as they navigate what continues to be a difficult economy.
In the first two quarters of 2011, research found that 71 percent of employees reported having a handle on their cash flow, 88 percent reported paying bills on time, 53 percent reported having an emergency fund in place and 57 percent reported regularly paying off credit card balances. All of these statistics are up from the 2010 numbers.

The report also found that now that many employees have addressed their immediate financial concerns, they are also putting significantly more focus on their retirement planning, as well as other long-term, proactive financial planning issues. Nearly 60 percent of questions received by the company’s financial planners were on long-term planning issues in Q2 versus 48 percent a year prior. Additionally, over 25 percent of employees’ questions were specifically about retirement planning, up from 20 percent in Q2 2010.

Only 14 percent of employees surveyed said they felt confident they were on track to replace at least 80 percent of their income in retirement despite the fact that employee participation in company-sponsored retirement plans increased six percentage points to 91 percent.

“There’s an interesting phenomenon at play here,” said Liz Davidson, Founder and CEO of Financial Finesse. “Employees are feeling less prepared, even though, in reality, most are doing better with their retirement planning according to research on average 401(k) balances, and our own research on the positive steps employees are taking to better save and invest for their retirement. We believe this is because many employees are getting a wake-up call as they look more closely into their retirement planning after ignoring it during the recession.”