That’s what the average career looks like, from your early 20s to your early 60s. And all along the way you’re supposed to be saving, saving, saving. Planning out how you’ll support yourself in retirement.
At least that’s the model. What happens when a global pandemic falls right in the middle of your plans? That’s when things get complicated. It’s no surprise, then, that one out of three Americans now pan to delay their retirement due to the pandemic, according to a new study called “The Four Pillars of the New Retirement: What a Difference a Year Makes,” released by Age Wave and Edward Jones this month.
In addition to the 30% delaying retirement number, the report concluded that the pandemic “has reshaped retirement.”
How many are we talking?
As of March 2021, about 69 million Americans said the pandemic “has altered their retirement timing.” That’s about 30% of all retirement age people, and is actually an improvement from December when 81 million said the same thing.
Most Americans (70%) have seen the pandemic as a financial wake-up call, saying it has “caused them to pay more attention to their long-term finances.” This sentiment rang true especially for Millennials and Gen Z. In fact, a third of those planning to retire (33%) are contributing more to their retirement savings because of the pandemic. Hispanics (46%) and Millennials (42%) were even more likely to say they are saving more for retirement than before the pandemic.The Four Pillars of the New Retirement report
What is there to worry about?
The bigger picture concern here isn’t so much that some people are delaying their retirement in the short-term, but the fact that this interruption might push their eventual retirement back by years.
Consider these troubling signs:
- As of March, about 14 million people said they had stopped contributing to their retirement accounts.
- Only 41% of women say they are saving each month for retirement vs. 58% of men.
- About 44% of pre-retirees said they were negatively impacted by the pandemic compared with 22% of retirees.
Will this have lasting consequences? It’s still too soon to tell, and it’s a good sign that things are improving since December, but any large scale disruption in the U.S. retirement economy can have far reaching effects.