Following 2020, Americans now see a shifting landscapeA recent study from the National Institute On Retirement Security, authored by Tyler Bond, Dan Doonan and Kelly Kenneally, reveals emerging worry about retirement prospects. Access the full report here.
A new report finds that across party lines, Americans are worried about concerns about their financial security in retirement. The vast majority of Democrats (70 percent), Independents (70 percent) and Republicans (62 percent) agree that the nation faces a retirement crisis. There also is bi-partisan agreement that the average worker cannot save enough on their own to guarantee a secure retirement, along with broad support for Social Security and pensions.
This new national survey of working-age Americans also reveals that the COVID-19 pandemic has exacerbated worries about achieving financial security in retirement.
More than half of Americans (51 percent) say that the COVID-19 pandemic has increased concerns about achieving financial security in retirement. And the COVID-19 concern is high across party lines: 57 percent among Democrats; 50 percent for Independents; and at 44 percent for Republicans.
To understand Americans’ views of the shifting retirement landscape, the National Institute on Retirement Security commissioned a national survey of working-age Americans to measure their sentiments on a broad range of retirement security issues. Retirement Insecurity 2021 | Americans’ Views of Retirement is based upon a national survey of Americans aged 25 and older conducted by Greenwald Research from December 4–10, 2020.
The research has five key findings:
- The COVID-19 pandemic has impacted many Americans’ concerns and plans for retirement
- A large swath of Americans is concerned about their economic security in retirement
- The nation is highly polarized, but Americans are united in their worry about retirement issues
- Americans are highly supportive of Social Security, and there is some support for expanding the program
- When it comes to pensions, Americans have highly favorable views about their role in the retirement equation and see these plans as better than 401(k) savings accounts
Excerpts from the Retirement Insecurity 2021 Study
The past year has presented extraordinary health challenges across the globe, triggering a deep economic crisis. In the U.S., the arrival of COVID-19 in early 2020 triggered a large-scale economic shutdown in an effort to help stem the spread of coronavirus. The result has been persistent and deep economic hardship, job losses and high unemployment. According to the Bureau of Economic Analysis, the U.S. economy shrank by 3.5 percent in 2020, pushing economic growth to a low not seen since 1946.
By January 2021, there were 26.8 million Americans out of work because of the virus or experiencing a reduction in hours and pay because of COVID-19. As the pandemic lingers, the economic impacts are expected to be longlasting. According to Moody’s, the 22 million jobs lost in the U.S. during the early months of the COVID-19 pandemic won’t be regained until early 2024. The economic fallout from the pandemic may create substantial uncertainty about financing retirement that could trigger Americans to work longer or rethink retirement altogether.
And in 2019 before the coronavirus pandemic, many workers still were recovering financially from the Great Recession. At the same time, the past several decades have seen dramatic changes to the U.S. retirement system that have undermined retirement for large swaths of the workforce. Much of the workforce lacks an employer-sponsored retirement plan, fewer workers have stable and secure defined benefit pensions, while 401(k)-style defined contribution individual accounts provide lower savings and protections. Also, increases to the Social Security retirement age translate into income cuts for retirees. Today, most Americans are not on track for a secure retirement.
To understand Americans’ views of the shifting retirement landscape, the National Institute on Retirement Security (NIRS) conducted a survey of working-age Americans to measure their sentiment on a broad range of retirement
The key research findings are as follows:
1. The COVID-19 pandemic has impacted many Americans’ concerns and plans for retirement. More than half of Americans (51 percent) say that the COVID-19 pandemic has increased concerns about their ability to achieve financial security in retirement. Among Americans who have changed or considered changing when they will retire, sixty-seven percent say that because of COVID-19, they plan to retire later than originally planned.
2. A large swath of Americans is concerned about their economic security in retirement. More than two-thirds of Americans (67 percent) say the nation faces a retirement crisis. More than half (56 percent) are concerned that they won’t be able to achieve a financially secure retirement. Some 68 percent say the average worker cannot save enough on their own to guarantee a secure retirement. And 65 percent of current workers say it’s likely they will have to work past retirement age to have enough money to retire.
NIRS Asked Americans In your own words, what worries you most about being able to achieve a secure retirement? “With the present economy due to COVID, I am afraid it will take several years to recover and for our retirement savings and investments to be enough for us to retire the way we originally set it up.”
3. The nation is highly polarized, but Americans are united in their worry about retirement issues. The vast majority of Democrats (70 percent), Independents (70 percent) and Republicans (62 percent) agree that the nation faces a retirement crisis. Americans also are united in their frustration that policymakers do not understand their retirement savings struggle. When it comes to Social Security, there is strong bi-partisan support for protecting this program, but mixed views about expanding it. Americans across party lines have a positive sentiment about pension plans and support making these retirement plans more available to workers.
Read more here.