Since the pandemic started, many people have focused on the future and the changes they’ll have to make in their retirement plans.
Although the pandemic has affected some people’s financial status, many others have been able to maintain their savings. They’ve also withdrawn some of their funds to pay their bills.
Ups and Downs
A study conducted by Fidelity Investments in 2021 revealed that more than two-thirds of American workers believe that the pandemic affected their retirement plans.
Of those respondents, 33 percent predict it will take three years to get back on track after the pandemic.
Although many of them are still facing financial issues, most of the respondents are confident that they can still retire comfortably.
Melissa Ridolfi, a senior vice president at Fidelity Investments, noted that it’s good to see that the retirement plans of Americans are still sound. Despite the challenges they’re facing, the majority of people still believe they can retire comfortably.
Ridolfi noted that the company’s record-breaking levels of planning engagements demonstrate the faith many people have in their financial future.
Staying the Course
Only 22 percent of workers have adjusted the age at which they plan to retire. Many of them are planning on delaying their retirement by a couple of years. According to a survey conducted by the Employee Benefit Research Institute, about 5 percent of the respondents are planning on retiring sooner than they intended.
Despite the various changes in the labor market, the majority of workers still believe that they can still retire comfortably. However, the pandemic has affected the ability to save for retirement. About 3 in 10 of the respondents stated that their savings have been affected by the pandemic.
Some Saw a Good Year…
Many workers who were not laid off or had their hours reduced during the economic shutdown were able to save a huge sum of money. They could also use this windfall to fund their child’s education or travel.
In the past year, about 30 percent of workers have made changes to their retirement plans. This number includes those who increased their contributions or stopped them entirely.
According to Copeland, about a million workers have withdrawn from their retirement plans in the past year. They were affected by various factors, such as the availability of a loan.
…Others Not So Much
The impact of the pandemic on the US economy was estimated to have resulted in the loss of around 10 million jobs by the end of 2020.
A survey conducted by the EBRI revealed that about 18 percent of the workers who were not permanently laid off experienced a reduction in their hours or pay. Ten percent of them were temporarily laid off.
According to Ridolfi, planning for retirement can help people stand out from the crowd and feel more secure in their future.