How Has COVID-19 Impacted Retirement Plans?

Jun 9, 2020 / Amanda Chase, Horsesmouth Assistant Editor

For those hoping to retire soon, the pandemic’s financial repercussions may delay their plans. Even mid-career professionals are anxiously eyeing their accounts. Among those who have already retired, the crisis may have decimated their savings, possibly requiring a return to the workforce. A new report from Personal Capital covers the results of a survey where over 1,000 Americans shared how COVID-19 was affecting their plans for retirement, surveying individuals in various age groups and stages in their careers. The results reveal a mix of anxiety and optimism and a range of reactions to economic uncertainty.

Nearly 9 in 10 respondents who are nearing retirement felt worried about the financial impacts of COVID-19 on their retirement savings. Furthermore, 30% described themselves as “extremely worried” in light of the virus’ economic impacts. Though many experts warn that panic is unwise, it’s hard not to be shaken by reports of record unemployment and volatile stock markets. Of those planning to retire in the next decade, 40% said COVID-19 would delay their plans.

If COVID-19 has troubled those planning for retirement, it has certainly affected current retirees as well. Among the individuals in retirement we surveyed, roughly 37% said they’d experienced financial hardship due directly to the virus. In fact, many retirees felt so threatened by the recent economic upheaval that they were considering working again. More than a quarter of these respondents said the pandemic had increased the chances that they would need to return to the workforce. More than half of retirees said they’d work for themselves if forced out of retirement, rather than seek employment from someone else. Nearly two-thirds of retirees were also reducing their spending due to COVID-19’s economic impacts, while a fifth said they’d moved assets away from the stock market.

Across age groups, a majority of respondents said they were more concerned about how the coronavirus might affect their health. But there were many who reported the opposite, particularly among millennials and Gen Xers. To some extent, this makes sense: The disease is most dangerous for older individuals, so younger people are less likely to fear hospitalization or death. But 38% of baby boomers also reported that financial worries outweighed their health concerns.

You can find more results and infographics here.

 

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