The COVID-19 pandemic has made a significant impact on many aspects of our daily lives. For one thing, it has made Americans increasingly worried about retirement.
According to the September 2020 SimplyWise Retirement Confidence Index, 58% of Americans are more concerned about retirement than they were a year ago.
SimplyWise also found that Americans closest to retirement are among those most concerned about their outcomes — with 58% of Americans in their 50s lacking confidence that they will be able to maintain their quality of life in retirement. Furthermore, according to the report, 30% of Americans in their 50s saved nothing for retirement during the last year, and 43% of them wouldn’t be able to stay afloat financially for more than a month using their savings.
This is understandable in light of the disruption, uncertainty, and an over10% unemployment rate in the wake of COVID-19. The study found that 15% of Americans who lost their jobs as a result of the pandemic are now planning to retire earlier — and that one out of 10 Americans in their 50s and 60s now plan to retire earlier than they expected.
With only 63% of those surveyed earning the same income as they were prior to COVID-19, many Americans also are planning to postpone complete retirement for as long as possible. SimplyWise reports that 73% of workers intend to work after they begin claiming Social Security, and 29% of Americans in their 50s intend to postpone retirement due to present economic conditions.
Worries about expenses and Social Security also have compounded Americans’ uneasiness about retirement. A whopping 63% of Americans who were let go or furloughed due to COVID-19 are unable to come up with $500 in cash today, and the survey found that 36% of Americans believe the economy will worsen over the next six months.
Meanwhile, 13% of Social Security beneficiaries are now thinking about selling their homes to cover expenses, and another 14% may refinance their homes to meet current expenses.
The Social Security Board of Trustees announced this year that the program’s funds will be totally gone by 2035, and SimplyWise found that 86% of Americans are worried that deferring payroll taxes — such as decreed by the executive memorandum signed by President Trump in August — will harm Social Security over the long term.
In a similar survey SimplyWise did in July 2020, 47% of respondents expressed concern about being able to pay medical bills in retirement (and 39% stated they were worried about their ability to pay living expenses during retirement).