As a result of the COVID-19 pandemic, more than half of employed Americans are now planning to work in retirement, according to Voya Financial. Many (40%) note an interest to have a “safety net” to cover unexpected costs and prepare for market volatility as their reasons.
Voya’s data also showed that, despite a world of financial uncertainty, saving for retirement remains a top priority for many:
- More than half (55%) of individuals said they would prefer to save enough to last through retirement rather than be completely debt-free.
- This preference for retirement savings over being debt-free was even more prevalent among individuals currently receiving investment guidance through a financial professional or managed account (67%) and those who are enrolled in a retirement savings plan (65%).
When it comes to generational views on retirement goals, Voya’s data also found that COVID-19 has had an impact on retirement planning for all savers.
The survey notes that 59% of currently employed baby boomers plan to work in retirement because of the pandemic, as well as 60% of Generation X and nearly half (49%) of millennials.
Good news nonetheless
The good news is that this sentiment about retirement is correlating to actions when it comes to saving for the future, particularly for millennials.
Voya’s own participant data also shows that among those who have recently changed their savings rate, approximately two-thirds (64%) of millennials are taking steps to increase their contributions, a growth of 16% over the year prior.
“We’re encouraged to see this understanding of needing to take a ‘long-term view’ exists across age groups, in particular those with a longer retirement horizon,” Charlie Nelson, CEO of Retirement and Employee Benefits for Voya Financial, said in a statement. “While the majority of generations have seen challenging times and volatile markets before, the findings of our survey and our own data show an even greater opportunity for employers to help their employees address both short- and long-term needs.
The survey also found a promising outlook on retirement saving for most individuals as roughly half (50%) reported ownership of a retirement plan, either through an employer-sponsored plan or an individual retirement account. This number increased from Voya’s prior wave of research in June (44%).
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
