COVID-19 eroding retirement hopes: Survey

COVID-19 eroding retirement hopes: Survey
More than 20% of people have pulled money early, or plan to, from retirement accounts, according to a report from Transamerica
MAY 19, 2020

Nearly a quarter of American workers say they have become less confident during the COVID-19 pandemic about their ability to retire, according to a recent survey from Transamerica.

Those closest to retirement are the most worried, with 32% of baby boomers saying they are now less confident, compared with 25% of Gen Xers and 20% of millennials, the company reported.

Overall 53% of the 2,000 people surveyed in mid-April said their feelings about their ability to retire have not changed, and 13% said that they are now more confident than they were before the crisis, according to the report. Eleven percent of people said they were unsure.

Millennials, while reporting the smallest increase in retirement concerns in the Transamerica survey, have been the most heavily impacted by the COVID-19 economy, a report in April from Hearts & Wallets found. That generation showed the biggest spike in job loss, and many put on hold their plans to buy homes or make other major purchases.

Five percent of the people Transamerica surveyed said they have had to retire early as a result of the crisis. Overall, 58% of people said their work situations have been affected, with 16% being laid off, 11% being furloughed, 17% seeing reductions in pay and 29% having their hours cut back, according to the survey.

To compensate for a drop in income, 22% of people said they either have taken or will take early withdrawals from their retirement plans. That course of action was by far the most common among millennials, 33% of whom said they have taken withdrawals or plan to, compared with 15% of Gen Xers and 10% of baby boomers, the report noted.

More than half of people surveyed, 53%, said they had emergency savings to fall back on. For many people, however, that would not cover expenses for very long — the median savings represented just $5,000, across generations.

Latest News

RIAs need to visit universities to attract students
RIAs need to visit universities to attract students

RIAs need to find universities that offer financial planning programs and sponsor or host events, advisor suggests.

Orion deepens Capital Group alliance with ETF portfolio tie-up
Orion deepens Capital Group alliance with ETF portfolio tie-up

The leading wealth tech provider is helping more advisors access active ETF models through its exclusive partnership.

JPMorgan client who lost $50M amid dementia battle denied trial
JPMorgan client who lost $50M amid dementia battle denied trial

Case of once-wealthy family highlights risks, raises questions on firms' duties to sophisticated investors suffering cognitive decline.

Stifel loses huge $14.2 million arbitration claim linked to star Miami broker
Stifel loses huge $14.2 million arbitration claim linked to star Miami broker

“The evidence in this case was overwhelming,” says an attorney.

$9B Gateway Investment Advisers names Julie Schmuelling president
$9B Gateway Investment Advisers names Julie Schmuelling president

The move marks the culmination of a decade-long journey for the new leader at the Ohio-based RIA and Natixis affiliate firm.

SPONSORED Leading through innovation – with Tom Ruggie of Destiny Wealth Partners

Uncover the key initiatives behind Destiny Wealth Partners’ success and how it became one of the fastest growing fee-only RIAs.

SPONSORED Client engagement strategies, growth and retention in the down markets

Key insights from Gabriel Garcia on adapting to demographic shifts and enhancing client experience in a changing market