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How are pre-retirees affected by coronavirus?

Download our infographic with 4 facts about how COVID-19 has affected thoughts on retirement planning.

Read below for a full synopsis.  

The economic turmoil caused by COVID-19 has forced many of us to reshape our future plans. It’s no wonder that many worry about their biggest goal: retirement. For better or worse, Coronavirus has changed our thoughts on how we will face leaving the workforce. A recent survey captures how investors in various stages of retirement view their retirement prospects after COVID-19.

Here are the key takeaways:  

1. 31% of aspiring retirees1 say that they have been financially impacted by COVID (meaning themselves or spouse/partner had a salary cut or reduced hours, was laid off or furloughed or retired early) 

2. 63% of aspiring retirees agree that COVID-19 has made them more focused on developing a clear financial plan for retirement, yet only 1/3 have a written financial plan for their retirement goals! 

3. All three groups surveyed felt that due to COVID-19, confidence in achieving their desired lifestyle in retirement decreased 

4. 18of Baby Boomers surveyed who have been impacted by COVID calculated their total needed for retirement. 17% updated their retirement plan. 16% called a financial advisor. 

While unfortunately the survey shows a lack of confidence to achieve their desired lifestyle retirement, it's worth noting that the respondents are more prone to take action about their finances. Perhaps in part that 33% of aspiring retirees fear they will have to work part-time in retirement,1 it's no wonder they're more focused on creating a clear goal. Boomers were more likely to take actions such as saving more, discussing money openly, and recalculating to make sure they're covered.

What’s the bottom line here? Coronavirus has quietly reformed how some view retirement.  In the survey, aspiring retirees are the most impacted by COVID-19. They are most likely to have their finances negatively impacted, and over half now say they are more focused on developing a plan for retirement.1   

It is worth nothing that older workers were also affected by Coronavirus. Boomers surveyed did more of certain activities due to the virus.  The coronavirus also created an initial surge in early retirement for ages 55+ in the early rough phase of the pandemic between March and April.2  

The pandemic has affected how some investors think they’re going to live their golden years. However, negative outlooks can lead to positive changes. The virus has prompted investors to begin thinking seriously about the big picture. Fortunately, it’s never too late to start!

Are you confident in your strategy?  Check our retirement calculator to make sure you’re covered. 

If you are unsure about your decisions, maybe it’s time to develop a solid strategy for your future. If you’re worried about your plan, setup a free 15 minute Q&A using the link below. 


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Background

 Aspiring retirees are defined as investors ages 55 to 75, $100k+ in investable assets and not currently retired.


 Sources:  

1Charles Schwab, 10/2020, Modern Retirement Survey,  https://content.schwab.com/web/retail/public/about-schwab/schwab_modern_retirement_survey_2020_findings.pdf 

2Forbes, 03/2021, Covid-10 Is Most Certainly a Retirement Story, https://www.forbes.com/sites/teresaghilarducci/2021/03/01/covid-19-is-most-certainly-a-retirement-story/?sh=599b1c451750