A Kiplinger-Personal Capital Poll: Retirement Planning During COVID
Many Americans say they plan to delay retirement so they can work longer and boost savings.
The pandemic, a volatile stock market and an uncertain economy have rocked the confidence of Americans saving for retirement. In a new poll conducted by Kiplinger in partnership with wealth management firm Personal Capital, 43% of retirement savers said the pandemic made them less confident that they will have enough savings to retire comfortably. More than one-third said they plan to delay retirement and work longer. A similar percentage planned to save more.
How has the global COVID-19 pandemic changed your confidence about having enough income to retire comfortably?
- My confidence hasn’t changed: 40%
- I’m somewhat less confident: 27%
- I’m far less confident: 16%
- I’m far more confident: 10%
- I’m somewhat more confident: 7%
A number of retirement savers fell even further behind by tapping their retirement accounts for living and other expenses: About one-third of respondents took a withdrawal or loan from their retirement accounts in 2020. However, even as the stock market was touching new highs, investment mixes reported in the poll were very conservative. Stocks accounted for just 36% of the average allocation, and cash made up a whopping 24% of portfolios.
How has the pandemic and its financial impact changed your retirement plan?*
- I plan to work longer: 35%
- I plan to save more: 34%
- I plan to curtail travel or other activities I expected to do in retirement to save money: 20%
- I changed my retirement financial projections: 12%
- I will claim Social Security benefits earlier than I originally planned: 8%
- I decided to hire a professional adviser: 7%
- My plan hasn’t changed; I will keep doing what I’m doing: 34%
How worried are you about recent stock market volatility?
- Somewhat worried: 47%
- Very worried: 27%
- Not worried: 26%
The poll, conducted in early November, surveyed a national sampling of 744 people ages 40 to 74, none of whom were fully retired, who had at least $50,000 in retirement savings. The median amount saved for retirement among all of the respondents was $188,800. The respondents were equally divided between men and women.
What is the current asset allocation for your investment portfolio or retirement accounts?
- Stocks: 36%
- Cash: 24%
- Bonds: 17%
- Real estate investments: 12%
- Other: 11%
Which of these statements best describes your response to the bear market early in 2020?#
- I did nothing and waited for the market to recover: 54%
- I changed my asset allocation to be more conservative: 19%
- I purchased more stock when prices fell: 13%
- I sold some investments to boost my cash position: 9%
- I sold all my stocks but have since reinvested at least a portion of my assets in the market: 4%
- I sold all my stocks and have not yet reinvested: 2%
A provision in the CARES Act allows people under age 59½ affected by the coronavirus to take a distribution of up to $100,000 from an IRA, 401(k) or similar account without penalty and to borrow up to $100,000 from an employer-sponsored retirement plan. A third of respondents took a distribution or loan from their retirement account.31.4% took a distribution from their retirement account, and 27.4% took a loan from their retirement account.
How much did you withdraw from your retirement accounts?
- Less than $25,000: 17%
- $25,000 to $49,999: 27%
- $50,000 to $74,999: 24%
- $75,000 to $100,000: 32%
How much did you borrow from your retirement accounts?
- Less than $25,000: 14%
- $25,000 to $49,999: 28%
- $50,000 to $74,999: 27%
- $75,000 to $100,000: 31%
What did you use the money for?*
- Living expenses: 63%
- Medical bills: 41%
- Home repairs: 32%
- Auto: 26%
- College tuition: 23%
- Helping family members: 21%
*Respondents were asked to choose all applicable options. #Percentages do not add up to 100% due to rounding.