A new survey of seniors by reverse mortgage industry leader American Advisors Group (AAG) has revealed that overall confidence in Americans’ ability to adequately retire has been severely impacted by the COVID-19 coronavirus pandemic, with over 85% of seniors reporting some level of concern about their retirement while over 79% felt the pandemic will impact their retirement lifestyle in some way.
According to two separate survey groups of 700 seniors conducted over a period of 60 days, in March only 16.9% of respondents reported no concern at all related to the pandemic’s potential effects on their retirements. In April, that figure dropped to just under 12.5%.
“Seniors have an overall concern for their future,” the company says in describing its survey results. “In April, 87.5% of seniors answered that they had varying levels of concern about their retirement (from slightly to extremely) due to current market conditions. Roughly, 40% in both March and April said they were ‘very’ or ‘extremely’ concerned.”
While less respondents characterized that there would be an impact on their lifestyles from the pandemic’s retirement effects in April compared to March, the drop was very modest, going from March’s 81% to April’s 79%. 25% of respondents characterized the lifestyle as either “very” or “extremely” impacted.
The data also indicates that an increasing number of seniors have less money in their retirement portfolios. In March, 26% of respondents reported that they had less than $100,000 in their portfolios, and that figure grew to 43% by April.
Additionally, slightly more seniors appear open to considering reverse mortgage products as a way to bolster their financial resources in retirement, based on the results. In March, 13% reported that they would consider a reverse mortgage loan if it could be determined that it would help their retirement portfolio to recover losses endured during the pandemic. In April, the positive response increased to 19.5%.
“The results of these surveys clearly show that seniors are worried about their financial future due to the effect that COVID-19 has had on the stock market,” said AAG Chief Marketing Officer Martin Lenoir in a statement provided to RMD. “The market volatility has had a huge impact on American retirement portfolios, which has led to increased interest in alternative solutions, such as utilizing home equity. We’re seeing more seniors using products, like a reverse mortgage line of credit, to access their home equity and give their other retirement assets time to recover.”
Read AAG’s announcement of the COVID-Market Survey Series results.