Many Americans need years to get their retirement savings back on track after the pandemic
As the nation enters the 13th month of the pandemic, many Americans say it will take them between two and three years to get their retirement savings going again, a new poll found. Most, however, remain optimistic.
More than 4 in 5 Americans said the economic impact of the pandemic is affecting their retirement savings. This is the result of Fidelity Investments' 2021 study on old-age provision. A third estimate that it will take them at least two years to recover. More than a third said they were more concerned about the ability to hold a nest egg in retirement than they did before the pandemic.
Read more: Expert: Retired investors should view uncertainty as their new normal
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The widespread job loss has forced some Americans to dive into retirement accounts in order to keep their households alive. Financial instability shifted or changed the size of retirement priorities and prospects for 79% of respondents.
Still, the vast majority remain confident that they can retire when and how they want, and 36% are now even more confident about their retirement plan than they were before, according to the survey.
More than 4 in 5 Americans said the economic impact of the pandemic affected their retirement plans. This is the result of Fidelity Investments' 2021 study on old-age provision. A third estimate that it will take them at least three years to recover. (Photo: Getty)
"What came as a surprise was this cautious optimism," John Boroff, director of retirement and income solutions at Fidelity, told Yahoo Money. "It refers to the most important thing people can do to get themselves back on track, and that's really all about the screen of planning and planning."
Read more: How to get your retirement savings going again
Calling the process “critical”, he said that “people with [financial] plans feel better and tend to do better” and are less afraid and more confident.
Stock market resilience may also have contributed to this optimism. After overcoming its pandemic fears on March 23rd last year, the S&P 500 hit a new high on March 17th this year and has risen 57% since hitting the bottom. The achievement, increasing the balance on the retirement account and creating a record number of millionaire savers.
"Building a stake in the soil"
For those who have to catch up, age is an important factor, according to Boroff. For younger people, with most of their working years ahead of them, a plan can be as informal as setting a target dollar amount and learning about the types of investments available.
For Gen Xer, Boroff tailored his advice to "add a fictitious target retirement age" and "think about what kinds of expenses you will actually have in retirement". As retirement age approaches, you should start worrying about income streams like social security.
Read more: Study: Retirees More than Doubled Their Debt in 2020
Unpredictability is a constant, but planning around the unknown reduces stress when emergencies arise.
"Just getting involved in the ground can go a long way in making people feel they are taking the right steps," said Boroff. "It's really just about getting this stuff up to date and checking it out regularly."
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Stephanie is a reporter for Yahoo Money and Cashay, a new personal finance website. Follow her on Twitter @SJAsymkos.
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