COVID-19 Fuels Uncertainty about U.S. Retirement, Wells Fargo Survey Finds
COVID-19 has raised fresh concerns about Americans’ retirement preparations, with some saying the pandemic has permanently impacted their ability to save for retirement, according to the 2020 Wells Fargo Retirement study conducted by The Harris Poll in August, which examines the attitudes and savings of working adults and retirees.
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Particularly for workers whose employment has been negatively impacted by COVID-19,1 retirement has become an even more challenging goal over the last eight months, with many expressing pessimism about their life in retirement – or worried if they can retire at all. Fifty-eight percent of workers impacted by the pandemic say they now don’t know if they have enough saved to retire because of COVID-19, compared to 37% of all workers. Moreover, among workers impacted by COVID-19, 70% say they are worried about how to make sure they don’t run out of money in retirement, 61% say they are much more afraid of life in retirement, and 61% say the pandemic took the joy out of looking forward to retirement.
Retirement savings provides a more striking contrast, showing that COVID-19 has driven some workers even further behind: Working men report median retirement savings of $120,000, which compares to $60,000 for working women, according to the study. Yet for those impacted by COVID-19, men report median retirement savings of $60,000, which compares to $21,000 for women.
“With individual investors now largely responsible for saving and funding their own retirement, disruptive events and economic downturns can have an outsized impact on their outlook,” said Nate Miles, head of Retirement for Wells Fargo Asset Management. “Our study shows that even for the most disciplined savers, working Americans are not saving enough for retirement. The good news is that for many of today’s workers, there is still time to save and prepare.”
Women and Younger Generations
The study found that women and younger generations are also falling behind. Women are less sure if they will be able to save enough for retirement, and appear to be in a more precarious financial situation than men. Barely half of working women (51%) say they are saving enough for retirement, or that they are confident they will have enough savings to live comfortably in retirement (51%). Women impacted by COVID-19 have saved less than half for retirement than men and are much more pessimistic about their financial lives. In addition, women impacted by COVID-19 are less likely to have access to an employer-sponsored retirement savings plan (59%), and are less likely to participate (77%).