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INFLATION TOPS HEALTHCARE AS BIGGEST FINANCIAL FEAR AMONG RETIREES

NEW SURVEY GAUGES HOW THE PANDEMIC IS RESHAPING RETIREMENT

Washington, DC, September 9, 2021: More than three-quarters (77%) of retirees and near-retirees cite declining purchasing power as a major concern, and that’s greater than the share concerned about the cost of healthcare (74%), according to a new poll released today by Kiplinger’s Personal Finance magazine and industry-leading digital wealth management company, Personal Capital, an Empower Company.

Rounding out respondents' top five financial concerns about the future were the financial strength of Social Security (71%) and Medicare (67%), and the possibility of an impending recession (62%). The national poll was conducted between June 17 and June 24, 2021.

“It’s clear that some effects of the pandemic—spiking consumer prices, an uncertain economy and stock market, and worries about the financial future of government safety nets—is creating unease among retirees and those nearing retirement,” said Mark Solheim, editor of Kiplinger Personal Finance magazine. “Fortunately, the savings rate has jumped, and those still working are taking action to create a more secure retirement,” said Solheim.

“It is extraordinary, though not surprising, to see worries about inflation eclipse the cost of healthcare as the leading financial concern of retirees,” said Jay Shah, President of Personal Capital. “However, retirees and near-retirees who are worried about looming inflationary pressures can stay focused on their overall investment strategy.”

“It’s wise to avoid letting current events drive long-term decision making,” Shah continued. “Having a plan that’s designed to endure varying conditions leading up to and during retirement is the key to increasing your financial confidence at any stage.”

Although they are concerned about inflation, respondents remain cautiously optimistic about their retirement and the overall economy:

  • Seventy-five percent (75%) say that, despite the pandemic, they are very or somewhat confident that they will have enough income to live comfortably throughout retirement.
  • A majority say they are very or somewhat confident the overall economy will improve over the next year (57%), and that the pandemic hasn’t changed their current or planned standard of living through retirement (58%).
  • An even larger majority (63%) say their investment outlook has not changed since the beginning of the pandemic.
  • Among their top financial goals over the course of the next year are:
    • Spending more on travel, hobbies and interests
    • Reducing spending
    • Simplifying finances
    • Monitoring investments more frequently
    • Investing more

Eighty-six percent (86%) of respondents received federal stimulus money during the pandemic; nearly half, 47%, saved the extra income, while 35% used it to pay bills and 18% paid off debt.

The pandemic has led a minority of respondents to alter their retirement planning, though it has had a more immediate impact on peoples’ current finances:

  • 1 in 3 say the pandemic has convinced them they will need a bigger nest egg for retirement
  • Among near-retirees who plan to retire within five years, more than 4 out of 10 (41%) say they have begun saving more, and nearly one-quarter (24%) are delaying their retirement date.
  • Seventy-one percent (71%) say they spent less during the pandemic, especially on entertainment (57%) and transportation (43%)
  • 1 in 3 say their overall living expenses increased, with 24% spending more on medical expenses and 17% offering more financial support to family members

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Methodology

The Kiplinger-Personal Capital national poll on The Impact of the Pandemic on Retiree Confidence was conducted June 17-24, 2021, with 772 respondents. The survey has a margin of error of +/- 3.52%. Respondents were screened for age (40 and older), retirement status (fully or partially retired, or plan to retire within five years), and net worth (at least $100,000).

About Kiplinger

For more than 100 years, the Kiplinger organization has led the way in personal finance and business forecasting. Founded in 1920 by W.M. Kiplinger, the company developed one of the nation's first successful newsletters in modern times. The Kiplinger Letter, launched in 1923, remains the longest continuously published newsletter in the United States. In 1947, Kiplinger created the nation's first personal finance magazine. Today, The Kiplinger Washington Editors, Inc., is a wholly-owned subsidiary of Dennis Publishing, Ltd. Become a fan of Kiplinger on Facebook or Kiplinger.com and follow Kiplinger on Twitter and LinkedIn.

About Personal Capital

Personal Capital, an Empower Company, is a remote-delivery, industry-leading digital wealth management company that helps people transform their financial lives through technology and advisory services. The company’s state-of-the-art tools and technology provide investors with a complete financial picture, utilized by millions of users and tens of thousands of clients. Its registered investment advisors provide expert guidance, and personalized strategies, based on a personal understanding of an investor’s financial picture and goals. Personal Capital currently manages more than $20 billion in assets (as of 7/31/21), virtually delivered from offices across the United States. For more information, please visit www.personalcapital.com or connect with us on Facebook, Twitter or LinkedIn.

Advisory services are offered for a fee by Personal Capital Advisors Corporation (“PCAC”), a registered investment adviser with the Securities and Exchange Commission. Registration does not imply a certain level of skill or training. PCAC is a wholly owned subsidiary of Personal Capital Corporation (“PCC”), an Empower company. PCC is a wholly owned subsidiary of Empower Holdings, LLC.

Contact: Alissa Neil

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