COVID-19 Put a Dent in Americans’ Ability to Save for Retirement, Survey Finds

COVID-19 Put a Dent in Americans’ Ability to Save for Retirement, Survey Finds

Editor’s Observe: This story initially appeared on The Penny Hoarder.

The COVID-19 disaster has affected the way in which many People are in a position to save for retirement, with shocking disparities amongst age teams, gender and even geographic areas.

Practically 17% of People say they’re saving much less cash for retirement due to the pandemic, in accordance to a new survey by The Penny Hoarder, which additionally discovered that 16% of respondents are saving extra money in response to COVID-19. The survey polled 1,001 individuals in October 2021.

Right here’s what else it discovered.

Geographic Variations

Pablo Calvog /

From a regional standpoint, individuals in the Northeast have been more likely to save extra cash for retirement in response to the pandemic than respondents in different areas, in accordance to The Penny Hoarder’s information. Amongst People who reported saving extra, 44% reside in the Northeast.

The numbers inform a totally different story in the South. Amongst those that are saving extra due to the pandemic, simply 14% reside in the South, whereas 31% of individuals saving much less are Southerners.

Disruptions in the tourism business could also be inflicting a slower financial restoration in the South than different elements of the U.S. For instance, in Orlando, Florida — the place roughly 1 in 5 staff labored straight in hospitality and leisure in 2019 — unemployment charges remained a lot larger than the nationwide common in 2020.

Different financial components — together with a state’s median wages, its unemployment price and the general price of residing — influence how a lot somebody can save for retirement in one state versus one other. Amongst people who find themselves saving much less due to the pandemic, 35% reside in the Northeast the place residing prices are excessive.

5 Methods You Can Save $500,000 in 15 Years

Gender Variations

Couple with savings
Andrey_Popov /

Males have been significantly extra doubtless to beef up their retirement financial savings in response to the COVID-19 pandemic than girls: 59% of males are saving extra in contrast with simply 41% of ladies.

Pre-pandemic numbers already pointed to a sizable gender hole in retirement financial savings. A 2019 Financial institution of America Merrill Lynch Office Advantages Report discovered that ladies enter retirement with $70,000 lower than males.

However the pandemic launched new challenges for working-age girls, particularly these with kids.

The price of youngster care is a vital monetary burden for many American households.

A September 2021 survey by The Penny Hoarder of two,000 mother and father discovered that just about 1 in 5 mother and father say that they had to stop a job due to excessive youngster care prices — discovering it made extra sense to depart the workforce totally than to pay for day care or babysitters.

Ladies have been additionally extra doubtless to work in sectors hardest hit by COVID-19 shutdowns, equivalent to hospitality and retail. Ladies skilled larger unemployment charges all through the pandemic than males, in accordance to the Bureau of Labor Statistics.

Since most People use employer-sponsored funding autos — equivalent to pensions and 401(okay)s — to save for retirement, much less workforce participation makes it notably difficult for girls to increase their financial savings.

Age Variations

Senior man with piggybank
Ranta Pictures /

Millennials have been the age group probably to save extra for retirement in response to COVID-19: 35% of People who say they’re saving extra throughout the pandemic are millennials ages 25-34.

In the meantime, these with the least period of time till retirement noticed the largest slide. Of the respondents who stated they’re saving much less, almost a quarter of Gen Xers between 45 and 54 — which means they could have missed a number of the post-pandemic market positive factors. Practically 28% of people that made no change to their financial savings have been Gen Xers.

Simply 19% of people that amped up their financial savings due to COVID-19 are in the 45-to-54 age group.

Saving for Retirement Is Important — Even Throughout a Pandemic

Woman with piggy bank
Jason Stitt /

Retirement is dear — and People have been struggling to save sufficient cash for it lengthy earlier than the coronavirus pandemic.

The financial turmoil of the pandemic underscored some essential classes about investing for the long run, together with maintaining calm throughout turbulent markets and utilizing market slumps as a possibility to make investments when costs are low.

Americans weren’t all in the same pandemic recession — and The Penny Hoarder’s new information underscores how uneven the restoration has been too.

Irrespective of your age or stage of life, it’s essential to put cash away for retirement. When you’re in your 20s, beginning to save now pays big dividends later. When you’re in your 50s, it’s not too late. Right here’s The Penny Hoarder’s complete information on how to save for retirement at any age.

Methodology: The Penny Hoarder used Google Surveys to conduct a nationwide survey concerning the influence of the pandemic on retirement financial savings. 1,001 individuals accomplished the survey between Oct. 5-7, 2021. Survey responses are weighted so that every response is consultant of the U.S. inhabitants.

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