While retirement is an exciting time, it can also be nerve-racking for many people. For some, living on a fixed income, coping with declining health, and dealing with the worry that they’ll outlive their savings is a concern. Unfortunately, retirement during COVID-19 has heightened risks.
Transamerica Center for Retirement Studies Survey
Transamerica Center for Retirement Studies conducted a survey in 2020 to learn more about retirees’ finances during the pandemic and how they prepared for retirement during COVID-19 and their working years. Here are some noteworthy findings:
- Savings: Fifty-six percent of retirees stated that they would depend on their savings if the pandemic took a toll on their finances. Others mentioned they’d rely on credit cards and stimulus money.
- Debt: Forty-five percent of retirees stated that paying off debt is their financial priority. Building an emergency fund and covering living expenses are other priorities.
- Legal Documents: Thirty-two percent of retirees have a healthcare power of attorney. Thirty percent have an advance directive, and 28% have a financial power of attorney.
- Long-Term Care: Twenty-one percent of retirees revealed they don’t have any plans for long-term care. While 41% stated they would rely on their loved ones if their health declines and need help with daily activities, 19% revealed they would move to a nursing home or an assisted living facility, and 17% explained they would use an in-home caregiver.
Lessons From Retirement during COVID-19
The pandemic’s economic impact on retirees can teach us several valuable lessons, including:
- Save Consistently: Rather than saving money every once in a while, save consistently. Seventy-eight percent of retirees in the survey reported wishing they would have regularly saved.
- Educate Yourself: Since retirement planning isn’t generally part of high school academics, it’s a topic where we may need more education. Sixty-six percent of retirees wish they knew more about how to plan for and invest for retirement.
- Avoid Debt: Debt can make it difficult to focus on financial goals like saving for retirement. 48% of retirees disclosed that debt got in the way of their retirement savings plans.
- Start Early: The power of compound interest reinforces just how important it is to save for retirement sooner rather than later. Fifty-three percent believe they waited too long to think about and save for retirement.
- Seek Professional Help: Retirement planning can be complicated. It is wise to find an expert to help. Thirty-eight percent feel they should’ve worked with a financial professional to plan for their retirement.
Consult Your Financial Professional
Together you and your financial professional can review your unique situation and determine how retirement during COVID-19 may affect your plans and options to help you save more. Contact your financial professional to get started.
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In addition, Safe Harbor Financial specializes in providing strategies and guidance for those who are seeking a better lifestyle in retirement. If you have retirement savings of five million dollars or $50,000, we can ensure it works as hard. As a result, we offer our experience and knowledge to help you design a custom strategy for financial independence. Contact us today to schedule an introductory meeting!