Since last March, consumers have encountered countless financial difficulties because of the coronavirus pandemic and the subsequent economic recession. New findings show that this has disrupted the plans of many Americans reaching retirement age.
In its new U.S. Retirement Survey, New York-based global asset management company Schroders found that just 26% of Americans near or at retirement age (ages 60 to 67) have enough money saved for retirement.
Within that age group, 60% said they don’t have enough saved for retirement, while 14% were unsure.
Health care costs, reduced assets hinder Americans’ retirement plans
The survey found that adults ages 45 to 75 who haven’t retired had various concerns about retirement, including:
- Higher health care costs than expected (89%)
- Health issues draining their savings (81%)
- Major market downturn significantly reducing their assets (81%)
- Not being able to afford their desired lifestyle (80%)
- Not knowing how to best generate income and/or draw down their assets (80%)
But today’s economic conditions are preventing some people from improving their financial situation. The biggest challenges that Americans had when it came to their retirement savings were:
- Not having enough saved yet to plan for retirement (70%)
- Having other financial priorities right now (60%)
- Feeling the future is too uncertain (50%)
Other surveys have found similar sentiment. In fact, almost 6 in 10 (58%) of consumers have withdrawn or borrowed money from their retirement amid the pandemic, with the majority using the funds for living expenses. Another found that 43% of Americans 65 and older expected long-term difficulties with their finances because of the COVID-19 crisis.
Meanwhile, the Schroders survey found that only 18% of non-retired respondents ages 60 to 67 were "fully on track" with their retirement planning, compared with 27% who said they’d done a "very good" amount of planning.
54% of retirees experiencing financial issues
According to the Schroders survey Survey, just more than 6 in 10 (62%) working consumers planned to continue working during their retirement for a variety of reasons, including:
- Staying busy (57%)
- Enjoying work (56%)
- Covering basic expenses (53%)
The survey also found that only 4% of Americans who have already retired said they’re "living the dream" when it comes to their finances, versus:
- 42% who said they’re comfortable
- 36% who said they’re "great but not bad"
- 18% who said they’re struggling
And 33% of retired Americans said their expenses were higher than they expected, with 1 in 10 noting they’re "a lot higher."
Methodology: 8 Acre Perspective conducted a nationwide survey for Schroders from Jan. 20-27, 2021. It surveyed 1,000 Americans consumers, with respondents falling into the following age breakdowns: