Retirement confidence is resilient among those unaffected by COVID-19, expert says
Despite the uncertainty caused by the pandemic, one expert said confidence is actually rising in retirement - but only for those whose jobs have not been interrupted by the coronavirus pandemic.
Among those who lost their jobs during the pandemic, there is "an entirely different level of confidence in retirement," said Lori Lucas, president and chief executive officer of the Employee Benefit Research Institute, on Yahoo Finance Live (video above).
But for those whose employment was unaffected, 72% of workers are "somewhat or very confident about their retirement".
Lucas painted a story of two different workers: married and employed and those who are not. Not surprisingly, the most confident workers are married and employed, while the singles and unemployed are less optimistic.
Another key to retirement confidence is knowing how much you need to comfortably pass your golden years, Lucas said. (Photo: Getty)
However, confidence in retirement cannot only be linked to marital and employment status. Lucas named other "key variables" in retirement confidence such as access to and participation in an employer-funded retirement plan, good debt management skills, and knowledge of how much they will need in retirement.
The rebound in equity markets also boosted confidence as investors "were pretty good at holding prices" and "enjoyed the market rallies that followed," Lucas said.
Read more: 3 important factors to consider when planning your retirement
Debt is another "big variable" found "in both employee confidence in retirement and retirement confidence," she added, noting that debt is seen as a barrier to saving and "cause [savers] a lot of stress in retirement".
Another key to retirement confidence is knowing how much you will need to comfortably pass your golden years. When people "took steps to calculate how much they need in retirement" or contacted a financial professional who can guide them, they are generally better prepared, Lucas said.
“Just calculating how much you need in retirement is a good first step,” she said.
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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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