23% of workers who are either employed or recently unemployed express that their confidence in retiring comfortably has declined due to the economic effects of the COVID-19 coronavirus pandemic. This is according to “Retirement Security Amid COVID-19: The Outlook of Three Generations,” a report released by the nonprofit Transamerica Center for Retirement Studies (TCRS).
“Workers across generations are at risk of not achieving a financially secure retirement – an issue of major concern long before the coronavirus pandemic,” said Catherine Collinson, CEO and president of Transamerica Institute and TCRS in a press release announcing the study’s results. “Now, the negative economic effects of the pandemic are further threatening retirement savings and security.”
The new study – a part of TCRS’ 20th Annual Retirement Survey of Workers – examines the retirement outlook of members of the millennial, Generation X, and Baby Boomer generations. The results are based on a survey conducted in late 2019, while offering comparisons with a supplemental survey conducted in April 2020 to compare the climate relevant to the topic both before and after the pandemic began.
“[The supplemental survey was conducted] after several states issued stay-at-home orders and large segments of the U.S. economy had temporarily closed due to the pandemic,” the release announcing the results explained.
While the long-term impacts of the pandemic have yet to be felt, some of the findings as of April 2020 indicate that 58% of respondents have experienced some kind of impact to their own employment as a result of the pandemic. Among these impacts are reduced work hours (29%); reduced salaries (17%); layoffs (16%); furloughs (11%) and early retirement (5%).
Additionally, as many as 1-in-3 millennial respondents (33%) related that they either already have, or plan to draw from their retirement accounts, a statistic which TCRS describes as “concerning.” This includes 22% who have already taken a loan and/or early withdrawal, and 20% who plan to do so.
“By comparison, only 15% of Generation X and 10% of Baby Boomer workers have already done so and/or plan to do so,” the announcement reads.
Retirement risks also vary by generation even before the pandemic. In the portion of the survey conducted in late 2019, fewer than half of workers (47%) related they “had either fully recovered (26%) or were not impacted (21%)” by the impact of the late 2000s financial crisis. 32% had “somewhat recovered,” 14% “had not yet begun to recover,” and 7% felt “they may never recover.”
52% of respondents also relate that they plan to keep working after they reach traditional retirement age, or simply do not plan to retire at all.
Read the full survey results for detailed breakdowns and respondent sample information.