Washington, DC) – How is the pandemic affecting retirement savings? Forty - eight percent of retirees with retirement accounts say that their savings have not recovered pre-pandemic levels, according to a new survey by The Senior Citizens League (TSCL). “There’s no doubt about it, the Coronavirus - caused recession is forcing many older adults to rethink retirement plans,” says Mary Johnson, Social Security and Medicare policy analyst for The Senior Citizens League. “While the U.S. stock market ended 2020 at an all - time high, the retirement savings held by many retired adults do not appear to have benefited from the run up,” Johnson says. “This is exactly why the guaranteed income nature of Social Security is so important,” she notes.
The survey, which was conducted from mid - January to mid-February of this year, asked the following “How has the coronavirus - caused recession affected the value of your retirement savings as of December 31, 2020?” Some 18 percent of survey participants reported that they had no retirement savings at all. Of those with retirement savings, 48 percent reported that the value of their retirement savings was still down on December 31, 2020 from the ending value on December 31, 2019. Thirty-one percent reported that their savings had recovered to about the same value as on December 31, 2019. Only 22 percent reported that their savings had increased by December 31, 2020. Of this group, only 9 percent said their savings had increased by more than 10 percent. (The S & P 500 stock index finished the year up by more than 16%.)
How the Pandemic is Affecting Retirement Savings as of December 31, 2020
|Stayed the same as the value on December 31, 2019||31%|
|Down by more than 25%||14%|
|Down by 10%-25%||23%|
|Down by less than 10%||11%|
|Increased by less than 10%||12%|
|Increased by 10%-25%||8%|
|Increased by more than 25%||1%|
Source: The Senior Citizens League 2021 Senior Survey
“Depending on how long it takes one’s retirement savings to recover, the 2020 coronavirus recession could have a deep and life changing impact on the retirement security of older Americans,” says Johnson whose own retirement savings were negatively impacted by the Great Recession of 2007- 09. “Those who have lost significant sums might plan to work longer and retire later if they can,” says Johnson. “Those who were working and have lost a job and their employer - provided healthcare coverage may wind up working for lower earnings, and could potentially experience worse health,” she notes.
All of this adds up to less money for retirement, and greater dependence on Social Security as insurance against retirement savings that are so closely tied to the value of equities and housing. “This situation was caused by COVID-19 and illustrates why Congress needs to strengthen Social Security and Medicare benefits,” Johnson says. The Senior Citizens League supports legislation that would boost Social Security benefits for all retirees and supports legislation that would lower Medicare costs.
With 1.2 million supporters, The Senior Citizens League is one of the nation’s largest nonpartisan seniors’ groups. Its mission is to promote and assist members and supporters, to educate and alert senior citizens about their rights and freedoms as U.S. Citizens, and to protect and defend the benefits senior citizens have earned and paid for. The Senior Citizens League is a proud affiliate of The Retired Enlisted Association. Visit www.SeniorsLeague.org for more information.