Even though 6 in 10 American workers surveyed made adjustments due to pandemic-related financial strain, around 82 percent continue to save for retirement, according to a recent report from Transamerica Center for Retirement Studies and Transamerica Institute.
The report, “Living in the COVID-19 Pandemic: The Health, Finances and Retirement Prospects of Four Generations” bases its finding on Transamerica Center for Retirement Studies 21st Annual Retirement Survey of Workers. The survey, which focuses on the retirement outlook for Generation Z, Millennials, Generation X and Baby Boomers, found many workers feeling the weight of financial worries during the COVID-19 pandemic.
“Workers are weathering a public health crisis and contending with fears about the virus and vaccinations, concerns for family and friends, employment impacts, and financial setbacks,” said Catherine Collinson, CEO and president of Transamerica Institute and TCRS in a press release about the survey.
Below are six findings from the report and how they impact workers across generations.
1. Pandemic hasn’t changed retirement plans for most workers
Around 61 percent of workers surveyed say the pandemic hasn’t thrown off their planned retirement date. Yet 31 percent say the pandemic has changed their retirement expectations, with 22 percent expecting to retire later and 9 percent intending to retire earlier than planned.
“Millennials (28 percent) are more likely to say they expect to retire later due to the pandemic, compared with Generation Z, Generation X, and Baby Boomers (19 percent, 19 percent, and 15 percent, respectively), according to the report.”
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2. Most workers saving for retirement despite the pandemic
Around 82 percent of American workers surveyed say they’re saving for retirement through employer-sponsored retirement plans or an IRA or similar retirement account.
“Given the magnitude of challenges workers have faced during the pandemic, it is truly remarkable that they have maintained focus on their future retirement,” said Collinson. “However, before the pandemic and today, many workers continue to be at risk of not achieving a financially secure retirement,” said Collinson.
3. Six in ten made financial adjustments
Six in 10 workers surveyed say they’ve made spending and saving adjustments due to pandemic-related financial strain. Around 32 percent reduced their everyday expenses, and 24 percent dipped into savings accounts to get by.
Nearly one-fifth (17 percent) reduced retirement fund contributions or stopped contributing to retirement accounts. Roughly 13 percent borrowed money, nine percent moved, and seven percent stopped paying rent or mortgage payments.
Baby Boomers (40 percent) were the least likely to make financial adjustments. Around 71 percent of Millennials adjusted their spending and saving, while 69 percent of Generation Z and 59 percent of Gen Xers had to revamp their finances to make ends meet.
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4. Most say paying off debt is a financial priority
Sixty-two percent of workers surveyed say that paying off one or more types of debt is a financial priority. Generation Z (35 percent) is focused on paying off student loans, while Millennials (43 percent) Gen Xers (42 percent) and Baby Boomers (37 percent) are slightly more likely to say paying off credit card debt is a priority.
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5. Worker health and financial anxiety higher during pandemic
More than eight in 10 (84 percent) workers told surveyors they’ve experienced heightened anxiety when it comes to health and financial concerns due to the pandemic. Around 68 percent cited health-related anxieties, including the risk of contracting COVID-19 (44 percent), their family’s health (40 percent) and their own health (32 percent).
Generation Z (91 percent) and millennials (88 percent) were more likely to feel anxious, with Generation X and Baby Boomers trailing slightly at 81 percent and 78 percent, respectively.
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6. Many workers remain confident in a comfortable retirement
Nearly two-thirds (64 percent) of workers surveyed say their confidence in a comfortable retirement is about the same as it was before the pandemic. Around 16 percent of workers have less confidence in a comfortable retirement now, but an optimistic 11 percent say their retirement confidence has actually improved. That’s not to say that the pandemic hasn’t changed the retirement landscape for many, however.
“One thing that workers share across generations is that many are at risk of not achieving a financially secure retirement, an area of growing concern amid the pandemic and its inevitable aftereffects,” says the report. “Given the disruption of the pandemic on workers’ employment, finances, health, and the increased strain on social safety nets, the retirement risks faced by workers are greater than ever before.”
