It's been just a few months since Covid-19, the novel coronavirus, made its debut on the world stage and sent shockwaves through economies and societies around the world. One of the most immediate concerns has been how the outbreak will impact people's retirement plans. In this blog post, we'll take a look at some of the latest research on how Covid-19 is affecting retirements in America and what that might mean for your own retirement planning.
A recent study from the University of Michigan found that nearly one in four American adults over the age of 50 say they have already delayed their retirement plans due to the Covid-19 pandemic. The most common reasons cited were economic concerns, including worries about job security, income loss, and market volatility.
Not surprisingly, the pandemic has also taken a toll on Americans' confidence in their ability to retire comfortably. A separate study from the Employee Benefit Research Institute found that just 36% of workers say they are very confident they will have enough money to live comfortably in retirement, down from 39% pre-pandemic. This marks the lowest level of retirement confidence since the Great Recession.
So, what does all this mean for your retirement planning?
First and foremost, it's important to remember that retirement is a long-term goal, and short-term disruptions like Covid-19 are unlikely to have a major impact on your ability to achieve it. However, the pandemic has served as a reminder of the importance of having a diversified portfolio and a solid financial plan in place.
When determining whether or not to retire during a recession, there are a few things to consider. First, it's important to think about your financial security. If you have a good nest egg saved up, you may be able to weather the storm without working. However, if you're relying on Social Security or a pension, you may need to consider working longer to make sure you have enough money to live on. Second, it's important to think about your health. If you're in good health and able to work, you may want to consider staying in the workforce longer. However, if your health is declining or you're not able to work, retirement may be the best option for you.
Additionally, it's important to think about your personal preferences. If you enjoy working and don't mind the current economic conditions, you may want to keep working. However, if you're ready to retire and don't want to deal with the stress of working during an economic downturn, you may want to consider retiring now.
Finally, don't let the current market volatility discourage you from saving for retirement. Remember, time is on your side when it comes to investing, and even small contributions can add up over time. If you're able to stay the course with your retirement savings, you should be well on your way to achieving your goals.