What’s the secret to financial resilience, even in a pandemic? Prioritize your health, start saving early, and be flexible. (Photo: krakenimages/Unsplash)
It’s the beginning of a new year, and our third living with the COVID-19 pandemic.
It’s hard to look beyond lockdowns, #WFH challenges, and PCR tests, but when Kiplinger magazine – in collaboration with wealth management firm Personal Capital – surveyed retirees and near-retirees about the pandemic a few months ago, they found that Americans are surprisingly resilient.
Most people say they’re still “on track” for retirement, despite COVID
Almost 60% of those surveyed say that despite the pandemic they are still “on track” to retire comfortably.
Another 27% said that COVID has changed their anticipated standard of living, but only “slightly.”
But saving more for retirement may not be a bad idea after all
About one-third of those surveyed now feel they’ll need “a bigger nest egg” to manage retirement. They’ll try to reach their goals by cutting spending and boosting their savings. Only 21% say they plan to delay retirement. About one-third said they would work part-time to earn extra income.
A larger number – 59% – say what they’re already saving is sufficient and no changes are needed.
Most people are content with their investment mix
The overwhelming majority of people surveyed (63%) says their investment allocation has not changed materially since the pandemic began.
Not surprisingly, higher-income investors (those earning over $200,000+) were more likely to have added stocks to their portfolio since the pandemic began, and reported rising portfolio values.
One-fifth of respondents said they are now more cautious about investing after experiencing the market drop in the early months of the pandemic.
The Takeaway: There are always bumps on the road to retirement, and living through the pandemic has been no exception. Many people have had their lives – and their income flows – significantly affected by illness, work and childcare interruptions, and business upheavals. The survey results suggest that the secret to financial resilience, even in the face of a major global disruption like COVID, is to start early and save a little bit each and every year for retirement, be flexible with your work and spending plans, and prioritize your good health and financial wellness.
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