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COVID-19 Impact on Retirement On Par with Great Recession

Life Stage Insights

Life Stage Insights

COVID-19 Impact on Retirement On Par with Great Recession

COVID-19 has disrupted retirement plans. But it has also served as a financial wake-up call for many.

Seven in 10 Americans say COVID-19 has damaged their retirement and retirement preparation, with one in five saying the pandemic has delivered a serious blow to their retirement plans.(1)


This assessment puts COVID-19’s retirement impact on par with the widespread damage to retirement plans caused by the Great Recession of 2007-2009. Six in ten Americans said their retirement plans were disrupted by the Great Recession – with one in five saying their retirement plans were severely affected.


In fact, the financial and job disruption caused by COVID-19 arrived as many were just starting to get back their financial footing. Forty-three percent of Americans say they were still recovering financially from the Great Recession when COVID-19 hit.


Many have been forced to prioritize short-term financial needs over retirement preparation. One in six say they have depleted emergency funds or savings, while one in ten have taken money out of their 401(k) accounts. 14% are setting aside less of their paychecks for retirement savings.(1)


More people are also planning to delay retirement. 54% of those planning to retire within the next five years say they will continue to work to address their savings gap.(2)


However, there is a silver lining: COVID-19 has also proven to be a financial wake-up call to many. About a third (34%) say the pandemic has made them want to improve their financial planning, and 39% said it has made them more willing to prioritize saving for their future.(3)

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Balancing short-term financial needs with long-term planning

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references
  1. TD Ameriprise Survey

  2. Fidelity Investor Survey, 2020

  3. Genworth Survey

Disclosures

This publication is designed to provide general information and is for discussion purposes only. The effectiveness of any strategy is dependent upon each individual’s facts and circumstances. This article does not provide legal, tax or account advice. Because of the possibility of human or mechanical error, the accuracy, adequacy, completeness or availability of any information is not guaranteed.

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