While retirement is an exciting time, it can also be nerve-racking for many people. For some, living on a fixed income, coping with declining health, and dealing with the worry that they’ll outlive their savings is a concern. Unfortunately, retirement during COVID-19 has heightened risks.
Transamerica Center for Retirement Studies Survey
Transamerica Center for Retirement Studies conducted a survey in 2020 to learn more about retirees’ finances during the pandemic and how they prepared for retirement during COVID-19 and their working years. Here are some noteworthy findings:
- Savings: Fifty-six percent of retirees stated that they would depend on their savings if the pandemic took a toll on their finances. Others mentioned they’d rely on credit cards and stimulus money.
- Debt: Forty-five percent of retirees stated that paying off debt is their financial priority. Building an emergency fund and covering living expenses are other priorities.
- Legal Documents: Thirty-two percent of retirees have a healthcare power of attorney. Thirty percent have an advance directive, and 28% have a financial power of attorney.
- Long-Term Care: Twenty-one percent of retirees revealed they don’t have any plans for long-term care. While 41% stated they would rely on their loved ones if their health declines and need help with daily activities, 19% revealed they would move to a nursing home or an assisted living facility, and 17% explained they would use an in-home caregiver.
Lessons From Retirement during COVID-19
The pandemic’s economic impact on retirees can teach us several valuable lessons, including:
- Save Consistently: Rather than saving money every once in a while, save consistently. Seventy-eight percent of retirees in the survey reported wishing they would have regularly saved.
- Educate Yourself: Since retirement planning isn’t generally part of high school academics, it’s a topic where we may need more education. Sixty-six percent of retirees wish they knew more about how to plan for and invest for retirement.
- Avoid Debt: Debt can make it difficult to focus on financial goals like saving for retirement. 48% of retirees disclosed that debt got in the way of their retirement savings plans.
- Start Early: The power of compound interest reinforces just how important it is to save for retirement sooner rather than later. Fifty-three percent believe they waited too long to think about and save for retirement.
- Seek Professional Help: Retirement planning can be complicated. It is wise to find an expert to help. Thirty-eight percent feel they should’ve worked with a financial professional to plan for their retirement.
Consult Your Financial Professional
Together you and your financial professional can review your unique situation and determine how retirement during COVID-19 may affect your plans and options to help you save more. Contact your financial professional to get started.
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In addition, at Pathway to Retire LLC our goal is to give you the control and flexibility in your retirement. We don’t want people to lose what has taken them so long to accumulate. Our team can help you create a well-thought-out strategy. In addition, we use tools to help you address your financial needs and concerns. In conclusion, contact us today to get started.