There’s typically quite a difference between what people say and what they subsequently do, but a recent Empower Retirement survey about stimulus money provided insight into how it will be spent.
Empower asked respondents how they used loans from their retirement savings and how they plan to spend $1,400 in stimulus money from the American Rescue Plan COVID relief package.
Stimulus money will pay down debt, be placed into savings and some said they will use it for the basics, like food and rent, according to the March poll. Overall, the results align with earlier Empower research indicating that Americans are increasingly prioritizing securing their financial futures.
As of March 18, about 27% of those surveyed had received the 2021 stimulus check; one in four (24%) had not received the stimulus money but know how they will spend it:
- 29% say they will use the money to put into savings; 34% of Millennials will put the money into an emergency fund
- 27% say they will use the money to pay down debt
- 10% say they will spend the money on basic needs
Changes from 2020
The 2021 plans for stimulus money have changed slightly from 2020, when 43% said they spent the stimulus money on basic needs and 39% said they used it to pay down debt and 37% put the money into savings.
Those who dipped into workplace retirement savings accounts in 2020 spent the money on basic needs like food and rent. Three in 10 American workers dipped into their retirement savings in 2020.
- 36% used the money for food and rent
- 35% paid down debt
- 31% put the money into savings
- 25% spend the money on home repairs
- 25% put money into an emergency fund
- 23% used the money for a trip
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.
