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Home>Daily Capital>Retirement Planning>How Has COVID-19 Impacted Our Retirement Plans?

How Has COVID-19 Impacted Our Retirement Plans?

As the impacts of COVID-19 continue to unfold, most aspects of American life have been substantially altered. And while our present circumstances are unprecedented, the future holds yet more uncertainty – and significant cause for fiscal concern.

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. While individual circumstances certainly differ, few are fortunate enough to feel entirely insulated from COVID-19’s economic fallout.

This report will cover 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. To see how Americans are responding to having their retirement plans imperiled, explore the results below.

Panic and Preparation

America’s retirement anxieties did not begin with the coronavirus: In many cases, COVID-19 is simply exacerbating vulnerabilities in workers’ retirement savings. The findings suggest that many felt unprepared for retirement before the pandemic – and many more now feel that way.

Indeed, nearly 9 in 10 respondents 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.

Whereas 63% said they felt financially prepared for retirement prior to the pandemic, just 52% said so in the wake of COVID-19. Unfortunately, recent research suggests that these concerns are likely warranted. Before the novel coronavirus was ever detected, researchers warned of an impending “retirement crisis”: As baby boomers exit the workforce, many have too little stashed away to support a comfortable lifestyle.

Of course, many do successfully plan for their golden years. Among respondents, those with three or more types of retirement income were far more likely to feel prepared for retirement. Diversification can certainly lend comfort in difficult times. Those with cash savings or bonds, for example, may be less shaken by the fluctuations of the market in the coming months. For others, the plan was simply to continue working: Of those planning to retire in the next decade, 40% said COVID-19 would delay their plans.

Retiree Reality

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.

Unfortunately, individuals coming out of retirement will face a daunting job market. With staggering national unemployment numbers, experts say older workers may particularly struggle to compete for opportunities. Perhaps that’s why 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.

Wealth or Well-being?

In the midst of their financial concerns, Americans have hardly forgotten that COVID-19 also threatens their physical health. But which form of potential harm do they find more alarming?

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.

This finding may speak to the degree of financial devastation baby boomers have experienced or simply the quantifiable nature of their economic challenges. While COVID-19 is an invisible threat, you can watch your accounts decline in real time.

Concern and Retirement Account Contributions

Even for respondents who had no imminent plans to retire, COVID-19’s impacts were unsettling. In fact, more than three-quarters of younger workers said they were concerned about how the virus would affect their retirement plans.

About a fifth of younger workers said they were “very” or “extremely” concerned about the coronavirus’s impacts. Because younger people typically have a higher percentage of their assets in stocks, they may be particularly exposed to recent market troubles. On the other hand, their portfolios have ample time to recover, whereas older investors may need to tap into their savings soon.

However, 21% of younger workers had stopped contributing to their retirement accounts, and 30% had weighed doing so. While this choice is understandable in a financial crunch, doing so has serious downsides. These respondents may be missing out on employer matching and compound interest in the long run.

On the other hand, most younger workers were taking other prudent steps in these uncertain times. Eighty-two percent said they were making lifestyle changes due to COVID-19’s financial impacts, and 69% were saving more. Additionally, a slight majority said they were investing less than they would have otherwise, which could reflect either their tightened budgets or general market uncertainty.

A Blow to Retirement Account Balances

Personal Capital decided to study how economic conditions and individual choices had actually impacted retirement accounts since the pandemic transformed American life. To do so, we analyzed the average account balances of Personal Capital users in each decade of life, assessing the relative effects upon their retirement savings.

Overall, the pandemic has had a negative impact on retirement savings. Across all age groups, balances fell for between January 31st and March 31st 2020. As one might hope, however, older individuals tended to endure somewhat smaller reductions in their retirement accounts than younger people, who have years to rebound from such setbacks. Individuals in their 80s, for example, saw only a 6 percent loss in their account balances, ostensibly because they’re invested more conservatively in their retirement years.

That being said, losses were still significant in age groups traditionally associated with retirement. People in their 60s, for example, saw a 10 percent plunge – a blow that could make many rethink their retirement plans. People in their 40s and 50s also saw double-digit percentage dips.

Outlook: A Mixed Bag

If many respondents were deeply concerned about the coronavirus, did they still feel hopeful about the future of the American economy? In considering their outlook for the next two years, respondents had divergent predictions.

To be sure, a significant minority felt hopeful about a swift rebound, with 42% expressing optimism about the next couple of years. But nearly as many took a grim view of the country’s short-term economic prospects. Six percent even described their outlook as “extremely pessimistic,” despite unprecedented government spending to avert fiscal disaster.

Interestingly, 57% viewed investing in the stock market as a good idea in the current economic conditions. This was the majority opinion among all age groups, though millennials were most likely to hold this view. Though experienced traders warn against attempting to time the market during a dip, long-term investments in solid companies can still work out well.

What Can You Do?

Retirement can feel shakier than it did prior to the pandemic, but there are great tools that can help you stay on track towards your retirement goals. Personal Capital’s free Retirement Planner tool will help you project your chances for success, and make real-time changes to your plan. Get started here. It’s free!

As the findings demonstrate, COVID-19 has prompted widespread financial worry, especially with regard to retirement. Across age groups, Americans are actively responding to a new reality and adjusting their retirement plans to the best of their abilities.

For some, this means delaying their departure from the workforce; others have contemplated returning to it. Many are saving more actively, while some have made the difficult decision to stop or reduce their retirement account contributions.

Yet while many of these adjustments may be appropriate, sudden shifts in strategy are often ill-advised. As our findings make clear, there’s no clear consensus about how to move forward. To avoid overreacting in uncertain times, you’ll need insight and sound advice.

That’s where Personal Capital can help, pairing expert financial guidance with an intuitive interface for monitoring your accounts and investments. Our tools bring the finance industry into the 21st century, increasing accountability and potentially eliminating unnecessary fees. To see how Personal Capital can increase your control in these uncertain times, register for our free financial tools to get started.


For this analysis, Fractl conducted an online survey of 1,004 adults. Fractl conducted the survey in May 2020 and surveyed only people that were either retired, currently working full time, or were working full time within the last three months. Respondents’ ages ranged from 18 to 80 with a median age of 38. Participants were divided into three groups: those that plan on retiring in the next 10 years (364 respondents), those planning on retiring in more than 10 years (508 respondents), and those that were retired at the taking of this survey (132 respondents). Please keep in mind that the data on this page are from a self-reported survey, and may be subject to biases inherent in any self-reporting survey, such as exaggeration, recency selection, and telescoping. In all instances, data was treated at face value, though participants were removed if they were found to be lying or missed an attention-check question. Fractl collected all survey data and is solely responsible for providing applicable required privacy disclosures to participants.

Methodology for Personal Capital Retirement Balances: Data presented represents the average dollar balances of retirement accounts linked by users of Personal Capital’s dashboard across several age ranges as of 1/31/2020 and 3/31/2020. Certain accounts, such as test accounts, major outliers with an account value greater than $100,000,000 or less than -$100,000,000, duplicative spousal accounts, and non-retirement accounts such as retail checking and savings accounts were excluded from this analysis. Please note change in balances can be due to fluctuations in underlying investments and/or withdrawals and contributions.

Fair Use Statement

With so many Americans reeling from COVID-19’s economic impacts, perhaps you know others who might be interested in our work. We welcome you to share our images and information as widely as you see fit. We do, however, have two requests. First, please attribute our team appropriately by including a link back to this page. Second, please use the contents of this project purely for noncommercial purposes. We thank you in advance for your support and cooperation.

The content contained in this post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. No part of this blog, nor the links contained therein is a solicitation or offer to sell securities. Third party data is obtained from sources believed to be reliable; however, Personal Capital Corporation (“Personal Capital”) cannot guarantee the accuracy, timeliness, completeness or fitness of this data for any particular purpose. Third party links are provided solely as a convenience and do not imply an affiliation, endorsement or approval by Personal Capital of the contents on such third party websites. Certain sections of this blog may contain forward-looking statements that are based on our reasonable expectations, estimates, projections and assumptions. Past performance is not a guarantee of future return, nor is it necessarily indicative of future performance. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

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