Retirement Planning During COVID
Many Americans say they plan to delay retirement so they can work longer and boost savings.
The pandemic, a volatile stock market and an uncertain economy have rocked the confidence of Americans saving for retirement. In a new poll conducted by Kiplinger in partnership with wealth management firm Personal Capital, 43% of retirement savers said the pandemic made them less confident that they will have enough savings to retire comfortably. More than one-third said they plan to delay retirement and work longer. A similar percentage planned to save more.
How has the global COVID-19 pandemic changed your confidence about having enough income to retire comfortably?
My confidence hasn’t changed
Early Retirement
40%
I'm somewhat less confident
27%
I'm far less confident
16%
I’m far more confident
10%
I’m somewhat more confident
7%
A number of retirement savers fell even further behind by tapping their retirement accounts for living and other expenses:
1/3
About
of respondents took a withdrawal or loan from their retirement accounts in 2020.
However, even as the stock market was touching new highs, investment mixes reported in the poll were very conservative.
Stocks accounted for just
36%
of the average allocation
24%
and cash made up a whopping
of portfolios
How has the pandemic and its financial impact changed your retirement plan?*
I plan to work longer
35%
I plan to save more
34%
I plan to curtail travel or other activities I expected to do in retirement to save money
20%
I changed my retirement financial projections
12%
I will claim Social Security benefits earlier than I originally planned
10%
I decided to hire a professional adviser
7%
My plan hasn’t changed; I will keep doing what I’m doing
34%
How worried are you about recent stock market volatility?
47%
Somewhat worried
27%
Very worried
26%
Not worried
The poll, conducted in early November, surveyed a national sampling of ...
744
people ages 40 to 70, none of whom were fully retired, who had at least
$50,000
in retirement savings.
$188,800.
The respondents were equally divided between men and women.
The median amount saved for retirement among all of the respondents was
What is the current asset allocation for your investment portfolio or retirement accounts?
Bonds, Real estate investments, and other allocations
37%
Stocks
17%
Bonds
12%
Real estate investments
11%
Other
24%
Cash
Which of these statements best describes your response to the bear market early in 2020?
I did nothing and waited for the market to recover
54%
I changed my asset allocation to be more conservative
19%
I purchased more stock when prices fell
13%
I sold some investments to boost my cash position
9%
I sold all my stocks but have since reinvested at least a portion of my assets in the market
4%
I sold all my stocks and have not yet reinvested
2%
A provision in the CARES Act allows people under age 59½ affected by the coronavirus to take a distribution of up to
$100,000
from an IRA, 401(k) or similar account without penalty and to borrow up to
$100,000
from an employer-sponsored retirement plan.
A third of respondents took a distribution or loan from their retirement account.
31.4% took a distribution from their retirement account, and 27.4% took a loan from their retirement account.
Retirement Account
How much did you withdraw from your retirement accounts?
Less than $25,000
17%
$25,000 to $49,999
27%
$50,000 to $74,999
24%
$75,000 to $100,000
32%
Less than $25,000
14%
$25,000 to $49,999
28%
$50,000 to $74,999
27%
$75,000 to $100,000
31%
How much did you borrow from your retirement accounts?
What did you use the money for?*
*Respondents were asked to choose all applicable options. #Percentages do not add up to 100% due to rounding.
63%
Living expenses
41%
Medical bills
26%
Auto
21%
Helping family members
23%
College tuition
This infographic was designed by Avalaunch Media
32%
Home repairs
