LOS ANGELES, August 5, 2021 / PRNewswire / – Although six in 10 workers (60%) have made adjustments due to financial constraints from the pandemic, 82% are saving for their retirement, according to Living in the COVID-19 Pandemic: The Health, Finances and Retirement Prospects of Four Generations, published today by the nonprofit Transamerica Center for Retirement StudiesÂ® (TCRS) in collaboration with the Transamerica InstituteÂ®.
As part of TCRS 21st Annual Worker Retirement Survey, One of the largest and longest-running surveys of its kind, the new study examines the retirement prospects of Gen Z, Gen Y, Gen X and Baby Boomers. It is based on a survey of salaried workers conducted at the end of 2020 and contains recommendations for workers, employers and policy makers to improve retirement security.
“Workers are going through a public health crisis and face fears over the virus and vaccinations, concerns for family and friends, impacts on jobs and financial setbacks,” said Catherine collinson, CEO and President of the Transamerica Institute and TCRS.
The survey results illustrate the experiences of workers across generations that can affect their health, financial well-being, and their ability to save and invest for retirement:
- Six in 10 made adjustments due to financial pressures from the pandemic, including reducing current expenses (32%), tapping into savings accounts (24%), accumulating new credit card debt (17%), reducing or stopping contributions to retirement accounts (14%), giving up health care (14%)), borrow money (13%), move (nine percent), and stop rent or mortgage payments (seven percent). Millennials, Gen Z, and Gen X (71%, 69%, 59%, respectively) are more likely than Baby Boomers (40%) to have made adjustments.
- Forty-three percent have experienced one or more negative impacts on their jobs, including reduced hours (27 percent), reduced wages (14 percent), time off (10 percent), layoffs (eight percent) and early retirement (four percent). Gen Z (59%) are more likely to have been negatively impacted than Gen Y, Gen X and Baby Boomers (51%, 39% and 30%, respectively).
- Sixty-two percent cite paying off one or more types of debt as a financial priority. Gen Z (35%) are more likely to cite student loan repayment, while Millennials, Gen X and Baby Boomers are slightly more likely to cite credit card debt (43%, 42% and 37%, respectively).
- Emergency savings are low. Workers only have $ 5,000 (median) emergency savings to specifically cover the cost of unforeseen major financial setbacks. Emergency savings increase with age: Gen Z workers have saved $ 2,000, Generation Y saved $ 5,000, generation X saved $ 6,000, and baby boomers have saved $ 10,000 (medians).
- Almost one in four people is a caregiver. Twenty-four percent of workers are currently caregivers of a relative or loved one. Millennials (30%) and Gen X (26%) are more likely than Gen Z and Baby Boomers (18% and 12%, respectively) to be caregivers.
- Six in ten people are concerned about their physical and mental health. Sixty-six percent of workers are concerned about their physical health and almost as many are concerned about their mental health (60 percent). Gen Z and Gen Y (72% and 70%, respectively) are more likely to be concerned about their mental health, compared to Gen X and Baby Boomers (59% and 42%, respectively).
Workers are saving for retirement, but few are ‘very’ confident about their long-term prospects
âConsidering the magnitude of the challenges workers faced during the pandemic, it is truly remarkable that they have maintained their focus on their future retirement. However, before the pandemic and today, many workers continue to run the risk of not achieving a financially secure retirement, âCollinson says.
The survey results illustrate the retirement prospects for workers across generations:
- Eighty-two percent of workers save for retirement through employer-sponsored plans, such as a 401 (k) plan or similar, and / or outside the workplace. Baby Boomers (84%) and Gen X (84%) and Gen Y (82%) are more likely than Gen Z (70%) to save. Of those saving for retirement, Gen Z started saving at 19, Gen Y at 25, Gen X at 30, and Baby Boomers at 35 (medians).
- Loans and early withdrawals from retirement accounts are not uncommon. Thirty-four percent of workers have already taken out a loan, early withdrawal and / or hardship withdrawal from their 401 (k) or similar plan or IRA, of which 25 percent have taken out a loan and 25 percent have took out an early loan and / or hardship withdrawal. Millennials (44%) are more likely to have already tapped into retirement savings than Gen X (33%), Gen Z (30%) and Baby Boomers (17%).
- Retirement savings may be insufficient. Total household retirement savings among all workers is $ 93,000 (estimated median). Baby boomer workers have the most retirement savings in $ 202,000, compared to generation X ($ 107,000), Millennials ($ 68,000), and Generation Z ($ 26,000) (estimated medians).
- Forty-nine percent of workers plan to work after 65 or do not plan to retire, a higher expectation among older workers. Seventy-two percent of baby boomers expect to work or already work after age 65 or have no plans to retire, compared to Gen X, Gen Y and Gen Z (51%, 37% and 36%, respectively). One in five workers (22%) expect to retire later due to the pandemic, with Millennials more likely to expect to do so (28%).
- Only 24% are âveryâ confident that they can fully retire with a comfortable lifestyle. Millennials (30%) are more likely to be âveryâ confident than Baby Boomers (21%), Gen X (19%) and Gen Z (16%). Sixteen percent of workers of all generations report that their confidence in their retirement has declined as a result of the pandemic.
How to improve workers’ retirement security
“The pandemic has exposed weaknesses and revealed opportunities for improving retirement security. The knowledge gained can be applied to effect positive change. A concerted effort is needed between workers, employers and policy makers,” said Collinson said. Each of these stakeholders could take additional actions, including:
- Workers can improve their fiscal health by creating a financial plan and gaining a full understanding of their situation. Preparing a budget, prioritizing spending, setting short and long term goals, learning about investing, and developing a retirement strategy are all important steps.
- Employers can improve their retirement and health and welfare benefits offerings, as well as their business practices, that can help employees protect their finances, save for the future, and manage work-life balance, while helping employers attract and retain talent in today’s highly competitive marketplace.
- Building on recent legislation, policymakers can implement further reforms that expand pension plan coverage, increase incentives for employers to offer plans, and facilitate retirement savings.
“The ability of workers to secure a secure retirement ultimately depends on access to meaningful employment throughout their life, availability of retirement, health and welfare benefits, and preserving safety nets such as social security and medicare, âCollinson said. âAs we emerge from the pandemic, we have an unprecedented opportunity to strengthen the fabric of our retirement system – including the way we live, work, retire and age with dignity. “
Living in the COVID-19 Pandemic: The Health, Finances and Retirement Prospects of Four Generations provides detailed survey results and comparisons by generation. Visit TCRS at www.transamericacenter.org to download the report and other research. Follow on Twitter @TCRStudies to stay up to date with the latest research from TCRS.
AboyouTransamerica Retirement Studies Center
The Transamerica Center for Retirement StudiesÂ® (TCRS) is a division of the Transamerica InstituteÂ®, a private, not-for-profit foundation. The Transamerica Institute is funded by contributions from Transamerica Life Insurance Company and its affiliates and may receive funds from unaffiliated third parties. TCRS and its representatives cannot give ERISA, tax, investment or legal advice. This material is provided for informational purposes only and should not be construed as ERISA, tax, investment or legal advice. For more information, visit www.transamericacenter.org and follow TCRS on Twitter at @TCRStudies.
About 21st Annual Retirement Survey for Transamerica Workers
The analysis contained in Living in the COVID-19 Pandemic: The Health, Finances and Retirement Prospects of Four Generations was prepared in-house by the research team of the Transamerica Institute (TI) and TCRS. The 25-minute online survey was conducted in the United States by The Harris Poll on behalf of TI and TCRS between November 17 and December 29, 2020 among a nationally representative sample of over 10,000 adults. The data in this report is presented for a sub-sample of 3,109 workers in for-profit companies with one or more employees, comprising 301 Generation Z (born 1997 to 2012), 1,249 Millennials (born 1981 to 1996 ), 960 Generation X (born 1965 to 1980), 573 Baby Boomers (born 1946 to 1964) and 26 workers born before 1946. The results were weighted as necessary to align them with the US resident population. , referring to census data for education, age by sex, race / ethnicity, region, household income, education, employment, marital status and household size. The weighting also adjusts for differences in attitude and behavior between those who are online and those who are not, those who join online panels and those who do not, and those who respond to surveys. to those who don’t.
Media contact: Andrew Cook
SOURCE Transamerica Retirement Studies Center