Nearly 4 in 5 Americans Didn’t Change Their Retirement Contributions or Investments Amid COVID-19 Crisis

While the coronavirus pandemic disrupted the way we work, shifted our spending and saving habits, and halted nonessential travel, it didn’t seem to rattle our retirement goals.

In fact, a biennial survey from investment bank J.P. Morgan reveals that nearly 4 in 5 Americans didn’t change their retirement contributions or investments because of the pandemic. Further, 90% say that they tend to persist in a volatile market.

Younger Americans want more financial planning guidance

Younger Americans need more guidance, according to survey respondents. In fact, 65% of plan respondents younger than 30 expressed they’d be willing to invest the time to plan for retirement, but are unsure where to begin. This compares to 51% of respondents overall.

Meanwhile, 74% of respondents younger than 30 feel their employers should offer professional financial help with finances — more than the 66% of respondents overall who feel this way.

And regarding their overall financial wellness, 80% of respondents younger than 30 feel their employer has a responsibility to help workers, compared with nearly 70% overall.

Majority worried about outliving their assets in retirement

While 69% are worried about outliving their money in retirement, only 47% have done the math to see what they’ll need to save to make it through their retirement years. And 33% aren’t confident about estimating how much they’ll need to retire should they continue saving the same amount.

And while respondents would like to save more for their golden years, they’re not. Three in 4 respondents said they know they should be stashing away at least 10% of their salary to be secure in retirement. However, 65% reported they’ve not contributed as much as they should in the last year. The reasons why include:

• To pay off debt (41%)
• Not earning enough (28%)
• Saving for other things (24%)
• Spending priorities (23%)

Expected retirement ages vary

J.P. Morgan survey respondents expect to retire at 65, on average. However, that varies based on age and gender. While 24% expect to retire at 64 or younger, 34% expect to be 66 or older — and 19% aren’t sure.

Americans nearing retirement are more inclined than those younger than 30 to expect to retire at a later age — 67.7 versus  61.3, on average. And men (13%) are more likely to expect to retire while younger than 60 versus women (4%).

Retirement plan participants who have been automatically enrolled are more likely to expect to retire younger — 64 versus 65.3.

Retirement savings remain a priority, but other obligations can get in the way

Lastly, respondents were asked to put $500 in different savings goals and vehicles. Here’s where respondents doled out their hypothetical cash:

• Retirement savings: $197.80
• Emergency savings: $134.10
• Debt payoff program: $72.90
• Health savings account: $60.80
• Transportation savings account: $34.40

If you’re interested in making greater headway on your retirement goals, you could look into debt consolidation. Going this route could potentially result in a lower interest rate and lower monthly payments. By bumping down what you need to put toward other financial obligations such as debt, you might have more money freed up to save for a nest egg.

Methodology: New York-based J.P. Morgan and Greenfield Research fielded an online survey in January 2021 of 1,281 defined contribution plan participants employed full time at a for-profit company with at least 50 employees. Each participant was at least 18 and contributed to a 401(k) plan in the last year.