As more and more are feeling income shocks and waning confidence in their financesNew study from SimplyWise explores how Americans are looking at retirement, Social Security and savings in light of today’s crisis.
NEW YORK, July 14, 2020 /PRNewswire/ — The latest SimplyWise Index found that 62% of Americans are more concerned about their retirement today compared to a year ago–up from 56% this May. This may be due to COVID-19-related unemployment and economic uncertainty which, like the pandemic itself, have disproportionately affected minorities and older workers.
The study was conducted as an online, random sample survey of 1,128 Americans ages 18+ between July 3-6, 2020 to understand the current environment for retirement today. It is part of SimplyWise’s ongoing efforts to support Americans’ retirement decisions. The company has been working with people throughout the coronavirus pandemic, offering, free of charge, its Social Security calculator and services to avoid having to visit Social Security offices.
Key report findings included:
- Half of Americans believe they will outlive their retirement savings.
- 80% of Americans in their 50s could not last more than a year off their savings.
- 24% of people are planning to tap their 401(k) today. (41% for those laid off due to COVID-19.)
- 72% now plan to work in retirement. (Up from 67% in May.)
- One in five Americans in their 60s have been laid off or furloughed due to COVID-19.
- 67% of White Americans are currently making what they made prior to COVID-19. (vs. just 50% of Hispanic Americans, 45% of Black Americans.)
- 63% of Black Americans could not come up with $500 cash today without selling something or taking out a loan. (vs. 35% of White Americans.)
- 48% of Black Americans and 43% of Hispanic Americans could survive less than a month on savings. (vs. 33% of White Americans).
- Half of Americans say another stimulus check is very important to their finances.
- 72% of Americans (83% of Democrats vs. 60% of Republicans) believe a recession will continue into the next year.
“In these difficult times, staying informed about new policies and educated on the benefits you’re owed, whether they are earned, spousal or survivor benefits, can help maximize hard-earned savings and income,” says Sam Abbas, CEO of SimplyWise, a fintech that empowers better decisions for modern retirement. “Even in today’s uncertainty, you can arm yourself with the options to ensure your future planning remains on track.”
Excerpts From the Retirement Confidence Index:
Since beginning to measure retirement sentiment in May 2020, the SimplyWise Index has found that confidence remains low though unchanged. When asked how they feel about their retirement today compared to this time last year, 59% of Americans say they are more concerned now. This is compared to 56% in May, 62% in July, and 58% in September.
COVID-19 has impacted the careers and finances of many Americans nearing retiring age. Of people in their 50s, 22% are now planning to postpone retirement from work, given the current economic climate. Of people in their 60s, 15% are now planning to postpone retirement. And of people in their 50s and 60s, 32% are now delaying Social Security retirement benefits. Those plans may be attributed to the fact that only 61% of workers in their 50s and 60s are making the same income they did prior to the pandemic.
According to results of the November Index, 28% of Americans saved nothing for retirement in the last year. The results were similar to those of May, July and September, when an average one in three Americans saved $0 for retirement. Moreover, a majority (58%) saved under $1,000 for retirement in the last year.
The pandemic has ravaged employment opportunities and savings for many Americans today. In fact, 43% of Americans would not be able to come up with $500 cash right now without selling something or taking out a loan. This number has stayed relatively flat across the Index, with approximately four in ten Americans unable to come up with that cash.
While the COVID-19 continues to alter our lives, but you can take control by educating yourself about your financial options to ensure your future planning remains on track.
SimplyWise builds financial confidence by making life’s complicated choices as simple as possible. Its proprietary Social Security calculator determines benefit eligibility, and its experts surface personalized recommendations to make the most of that income in retirement.