A year and a half after the start of the coronavirus pandemic, many are ready to plan out what their post-pandemic lives may look like. Those reaching retirement age, especially, have even more to consider.
New findings from Kiplinger and Personal Capital — a personal finance publication and digital wealth management company, respectively — indicate that today's retirees and near-retirees are now more concerned about inflation (77%) than the cost of healthcare (74%) in their golden years.
Other top concerns cited by respondents include the financial strength of Social Security (71%) and Medicare (67%), as well as worries of another recession (62%).
Majority of respondents are optimistic about their retirement prospects
Despite the financial turmoil caused by the COVID-19 outbreak, survey participants remain hopeful about their retirement prospects: 75% say they are "very or somewhat confident" in their ability to live comfortably in retirement.
A majority of respondents also report that:
- Their investment outlook hasn't changed since the beginning of the pandemic (63%)
- The pandemic hasn't changed their current or planned standard of living in retirement (58%)
- They’re confident the economy will improve in the next year (57%)
Still, 36% think that the current health crisis has lowered their expected standard of living in retirement, while a third of respondents believe they’ll need a bigger nest egg for their future. Specifically, members of this last group say they plan to save more for their retirement by doing one or more of the following:
- Cutting spending (62%)
- Boosting savings (41%)
- Taking a part-time job to boost income (32%)
- Boosting investments (25%)
- Delaying retirement and work longer (21%)
- Adopting a more conservative withdrawal rate from savings (14%)
Similarly, another survey from Logica found that a third of American workers expect to delay their retirement because of the pandemic — a percentage that has increased from about a quarter of respondents in the spring of 2020.
71% of retirees reduced pandemic-era spending
The joint survey from Kiplinger and Personal Capital also took a look at the other expenses incurred by retirees and near-retirees during the pandemic. For instance, it found that 86% of survey participants received federal economic impact payments (also known as stimulus checks) and used that money to:
- Bolster their savings (47%)
- Pay bills (35%)
- Pay down debt (18%)
But although 71% of respondents say they spent less during the pandemic — particularly on entertainment (57%) and transportation (43%) — one-third of them report an increase in spending. Of this group, 24% used it for medical expenses and another 17% supported their family members financially.
A different survey, this time from CNO Financial Group, echoed these findings — it indicated that middle-income baby boomers who provided financial support to family members were negatively impacted by this decision. In particular, this cohort saved less for retirement, delayed moving plans and had to reevaluate their finances for retirement.
Methodology: On behalf of Kiplinger and Personal Capital, Qualtrics conducted a national poll of 772 respondents (ages 40 and older, with a median age of 67) from June 17 to June 24, 2021. In addition to having a net worth of at least $100,000, respondents were either fully or partially retired, or had plans to retire within five years.