Can you avoid the pandemic impact on your retirement plans?
- August 31, 2020
- Economy, Retirement Planning
The pandemic has presented real consequences for people near retirement. A report from the Alliance for Lifetime Income found that:
- 20% of people age 56-75 are delaying retirement because of the pandemic. That is approximately 3.2 million Americans.
- About 70% of the people in that age group said they are more pessimistic about their retirement prospects than they were before the pandemic.
- Half of those surveyed said they are actually rethinking their retirement plans, which includes when they will retire and how much money they’ll need in retirement.
According to a survey from Principal, the pandemic is taking a smaller economic toll on people have been saving better in their years before retirement. Among those surveyed, the people who were saving more than $17,000 per year as they get closer to retirement, 98% said they are comfortable with their financial situation leading up to retirement.
What can we learn from this and what do you need to be doing?
Savers are planners. Good savers are planning more for that retirement transition. It is vitally important to have the right plan and understanding that plan. You need to have a plan that can protect income in those early years of retirement.
You also need to have a life plan. How are you going to spend that first year of retirement? You aren’t going to have the same kind of structure you had in your working years. The emotional side of retirement is also important to consider when transitioning to retirement.
Having a good plan and understanding that plan is a key component to being able to prepare for success and confidence so that you can retire and thrive especially in those early years of retirement.