If the coronavirus has affected how much you're saving for retirement or has you worried that you won't be able to retire when you had originally hoped, you're not alone. An Allianz survey from the spring showed that nearly half of Americans slowed or altogether stopped saving for retirement earlier in the pandemic. Now, new survey results from Northwestern Mutual show that 20% of Americans expect to delay their retirements as a result of the pandemic.
Northwestern Mutual conducts its annual survey of Americans' financial habits in February, so this year's results captured American attitudes right before the pandemic swept across the world. In light of the upheaval that the virus caused, the company asked a new set of questions in the middle of the summer to see how the coronavirus had affected Americans' financial planning.
"One of the things that's notable for me," says Christian Mitchell, chief customer officer at Northwestern Mutual, "is the fact that Americans are taking their financial security more seriously."
That's backed up by the numbers: The pandemic stimulated more than a third of Americans to adjust their financial plans in some way, the survey finds. Another 15% said that while they had no financial plan before the pandemic, Covid-19 prompted them to make one.
"A crisis like this — it has a lasting impact on people's psyche," Mitchell says.
The group whose collective psyche seems most affected by the pandemic is Gen X. A quarter of Gen Xers expect the pandemic will delay their retirement, compared to 20% of the general population, the survey found.
Gen Xers are also more stressed about retirement in general. Nearly 60% say that planning for retirement causes them high or moderate levels of anxiety, while less than half of millennials and Gen Zers and only a quarter of baby boomers feel that stress.
In addition, more than half of Gen Xers also worry that they'll outlive their savings.
It may make sense on some level that Gen X would be the most stressed out of the four age groups. Millennials and Gen Zers still see retirement in the distance, while most boomers are either on the cusp of retiring or are already well into their golden years.
By contrast, the prospect of having to figure out how to fund a comfortable retirement is no longer abstract or far away for people in their 40s. It can feel very real and daunting because they may realize how much they need to do that perhaps they have not yet done.
"Gen X is the generation that, by and large, is in the thick of everything, personally and financially right now," says Chantel Bonneau, a financial advisor with Northwestern Mutual. That may include working from home in established careers while also teaching their school-aged children who are attending school remotely. Many Gen Xers are probably settled in their homes and well into their mortgages, making it more difficult for them to change their financial plans at the flip of a switch, Bonneau adds.
"They're living in that very stern reality," she says. "Whereas some of the younger generation perhaps have the opportunity to go back and live with their parents or move out of an expensive city."
Regardless of age or financial preparedness, Mitchell hopes the coronavirus pandemic will stir people to action. If you're anxious now, he advises you attack the problem head on (as uncomfortable as that might be) by creating a budget to understand exactly how much money is coming and how that money is spent.
In the pandemic "a lot of people did these things around the house that they've been putting off forever," Mitchell says. "They cleaned out their basement, or they organized their garage."
He suggests taking a similar approach to your wallet, from your current income and spending habits, to longer-term financial goals, like saving for retirement.
"Clean out the dirty basement of your financial life," Mitchell says, "and be able to look at that in a clear-eyed way to then inform the subsequent choices."
Northwestern Mutual published its first survey on American money habits in 2009, and Mitchell looks to the advances Americans made in the decade after the Great Recession, from carrying less debt and reporting higher levels of frugality, as hopeful signs that the pandemic can bring about good change.
"If you look at it over that 10 year period," Mitchell says, "what's really interesting is how much better people feel over that decade."
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