COVID-19 Has Delayed Retirement For Many Americans
More than a third of consumers have pushed back or have considered pushing back their retirement date due to the effects of the COVID-19 pandemic, according to a new report. In response to the pandemic and financial stress, many have also reduced their spending.
A survey from the research arm of the Society of Actuaries, a global professional organization, reported that the pandemic has delayed retirement for many Americans.
The survey, which emphasized the impacts of COVID-19 by race, showed that 30% of Black respondents, as well as 38% of Asian Americans and 37% of Hispanic respondents, have considered changing when they will retire, with Hispanics reporting the highest amount of retirement anxiety.
The result of this latest survey may indicate an expectation of a later retirement rather than an active decision to plan for one, which may reflect that the respondents expect the effects of COVID-19 to reverberate for years to come.
“People have said they are changing their plans, however many people don’t do long-term planning for retirement,” a member of the Society of Actuaries Research Institute’s Aging and Retirement Program, Anna Rappaport, said.
“People believe they will retire later as a result of the pandemic, and the research findings indicate that individuals expect a long-term impact,” she said.
Rappaport noted that postponing retirement carries risks, including the risk of being forced to retire in later life, either because of health issues or being pushed towards retirement.
“People may not be as financially secure if they are forced to retire, and as our research shows, the pandemic has led to some consumers changing or considering changing when they retire,” Rappaport said.
“It indicates an involuntary decision that impedes the ability to plan for retirement as early as possible,” she said, stressing the need to plan for retirement early in order to ensure financial security.
Notably, the delay in retirement was not even by race, nor were financial priorities the same across race.
Feelings of financial insecurity were also noted by the survey. They were also uneven by race.
Less than half of Black and Hispanic respondents said they felt that they are moving towards a financially secure retirement, the survey said. In contrast, about 58% of Asians reported they did.
The survey reported that 57% of Hispanic respondents, 37% of Black respondents, and 35% of Asian respondents intimated that the pandemic has worsened their financial outlook.
Many respondents had changed their housing, and had either given or received financial assistance from family, and many also said that they would not be able to handle a surprise $10,000 expense.
Although, financial anxiety is not exclusively the domain of COVID-19. Concerns about the effect of climate change, for instance, have also prompted retirement security concerns, especially among Hispanics, the report said.
Previous research from the Society of Actuaries reported that the populations that are considering putting off retirement were also unlikely to work with a financial professional in 2020, according to Rappaport. In that year, according to her summary of their figures, 20% of Blacks worked with financial professionals, 25% of Hispanics did, and 30% of Asians did.
Rappaport also gave a few tips for Americans looking to prepare for retirement.
She emphasized that they “stabilize [their] finances” and then plan and save for retirement. Paying off debt and learning to manage week to week is also crucial, according to Rappaport.
The report, “Report on Race and Ethnicity,” was part of the institute’s larger project to map out the financial perspectives of aging and retirement of Americans across five generations, “Financial Perspectives on Aging and Retirement Across the Generations.”
The market research firm Greenwald Research conducted the newest study, using an oversample of Black Americans, Asian Americans, and Hispanic American respondents.