25 January 2022

Pandemic Not Stopping Workers From Contributing to Retirement Plans

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An overwhelming majority of U.S. workers are still saving for retirement despite the adverse economic, health and employment impact of the coronavirus pandemic, the Transamerica Center for Retirement Studies said Thursday.

Eighty-two percent of workers are saving for retirement through a 401(k) or similar retirement plan and/or outside the workplace, the center reported.

"Given the magnitude of the challenges workers have faced during the pandemic, it is truly remarkable that they have maintained focus on their future retirement," Catherine Collinson, CEO and president of the center and of the Transamerica Institute, said in a news release. The center is a division of the Transamerica Institute, a non-profit private foundation.

Baby boomers and Generation X were the biggest savers, each at 84%, followed by millennials (82%) and Generation Z (70%), the news release said.

The workers' savings data is part of the center's and institute's 21st annual survey of U.S. workers.

Among the survey's findings:

Only 24% said they were "very confident" they could fully retire with a "comfortable lifestyle."

Forty-nine percent said they plan to work past age 65 or don't plan to retire, including 72% of Baby Boomers.

An estimated median of $93,000 in retirement savings for all workers, leading to concerns of inadequate savings. Baby boomers had an estimated $202,000 median, compared with estimated medians of $107,000 for Generation X, $68,000 for millennials and $26,000 for Generation Z.

The news release also described a series of problems encountered by workers. They include:

Forty-three percent experienced one or more "negative impacts" to their employment including reduced hours, reduced salaries, furloughs, layoffs or early retirement.

Sixty-two percent are paying off one or more types of debt "as a financial priority," ranging from student loans to credit card balances.

Sixty-six percent of workers are concerned about mental and physical health.

The median emergency savings is $5,000, ranging from a $2,000 median for the youngest (Generation Z) to $10,000 median for the oldest (baby boomers).

The survey was conducted for the institute and center by The Harris Poll between Nov. 17 and Dec. 29, 2020, covering more than 10,000 adults. The data analyzed in the news release covered 3,109 workers in for-profit companies.

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