Americans’ Concerns About Retirement Savings Increase
With the current pandemic continuing to upend many Americans’ way of life, it seems as though today’s economic issues have workers worried about their financial futures. According to a new survey by Simplywise, 62% of respondents say they are more concerned about their retirement today than they were one year ago. What’s more, this figure is up from 56% who said the same in May. As a result, 72% of those surveyed report planning on doing paid work during their retirement.
In terms of specific fears facing future retirees, 55% said they worry about Social Security running dry. Meanwhile, half of the respondents are concerned that they’ll end up outliving their savings. In turn, other oft-cited concerns include an inability to pay medical bills (47%), not being able to cover daily living expenses (39%), and having too much debt (28%). Additionally 37% fear that they won’t be able to retire at all.
Although the survey looked mostly at retirement, it also makes it clear that the financial issues that some Americans anticipate down the road are due to current circumstances — including the impacts of the ongoing pandemic. For example, 24% of those surveyed say they’re tapping their 401(k)s now. This includes 41% of those who have recently been laid-off. Speaking of layoffs, looking specifically at older adults, one-fifth of workers in their 60s reported recently losing their job or being furloughed. Meanwhile 72% of those surveyed said they expect the recession to last into next year.
Incidentally, a separate survey recently found that Americans have been opening retirement accounts in greater volume over the past few months. The investment platform Stash reports that 60% more IRAs (both Roth and traditional) were created between March and June of this year when compared with the four months prior. This increase was even more pronounced among those 65 and older, with that age group opening 76% more accounts. Of course, it’s worth noting that the decision by the IRS to move the tax deadline from April to July may have also played a role in this surge considering the tax benefits associated with retirement contributions.
Given the major economic havoc that COVID-19 is wreaking, it’s no wonder that a growing number of Americans have concerns about their financial futures. Adding to that uncertainty is the lack of progress on future relief packages, even as half of the survey respondents say that a second stimulus check is important to their finances. Ultimately it will likely take some time for the nation to recover and for these fiscal anxieties to subside. In the meantime, hopefully those hardest hit — including recent and upcoming retirees — will be able to get the support they need.