How COVID Has Changed Our Retirement Plans

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.

About Mari Adam

Mari Adam, Certified Financial Planner™ has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!

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