Although the wider availability of several COVID-19 coronavirus vaccines and the nationwide relaxing of certain restrictions on economic activity are highly encouraging signs for the nation’s recovery from the crisis, as many as 1 in 4 Americans are planning to retire later than they originally planned, including 42% of people who lost income during the pandemic period.
This is according to a new survey released by MagnifyMoney, a subsidiary of LendingTree.
Other key findings include adverse effects on the ability for Americans to save money; regrets among people who tapped their retirement savings in order to make ends meet during the crisis; an exacerbation of Americans’ saving situation as many were already behind on saving for retirement; and a lack of income remaining a major barrier to saving practices.
In total, 41% of respondents did say that their savings were not impacted by the effects of the pandemic, with 11% of respondents actually managing to increase their savings during the affected period.
“But the other 48% of respondents have either stopped contributing or decreased [retirement] contributions for a period or altogether,” the survey results read. “Of this group, 20% say they’ve resumed or increased contributions, 16% haven’t started saving and 12% haven’t increased their amount after decreasing it.”
Less than 4 in 10 Americans (39%) responded that they had withdrawn or borrowed from their savings accounts during the pandemic, but those who did extract money from those accounts did not do so for “advantageous” reasons, the results read.
“47% used the money to cover expenses, with another 21% using it to help a loved one struggling financially,” the results read.
Other reasons for tapping savings and retirement accounts as listed by respondents included paying off debt (25%); taking advantage of legislation allowing withdrawals without penalty (21%); losing a job (18%); and worrying about losing money in the stock market (9%).
“Taking an early withdrawal may seem like a good quick fix for some cash, but doing so can seriously derail your long-term retirement savings,” said Ismat Mangla, MagnifyMoney’s content director in the posted survey results.
Over three-quarters (77%) of respondents related that they have some kind of regret tied to the decision to take money from retirement accounts, with 74% already actively working to restore some of the depleted savings during the pandemic.
Marketing research firm Qualtrics was enlisted by MagnifyMoney to conduct the survey, which included 2,050 U.S. consumers responding during the period of May 3-6, 2021. A non-probability-based sample was used in conducting the survey, using quotas to ensure the sample base represented the overall U.S. population.
Read the survey results at MagnifyMoney.