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When the Employment Benefit Research Institute (EBRI) surveyed 2,042 workers and retirees for its annual retirement confidence survey in January, it didn't expect a global pandemic to come along and skew the metrics. Enter the supplemental survey, conducted late March in an effort to gauge if and how COVID-19 had changed their outlook.
The results suggest that although COVID-19 has correlated with workers feeling less confident about covering expenses and in retirees forking out more than they'd expected to, retirement was the least of their concerns.
General confidence about living comfortably in retirement for both groups stayed about the same between January and March, and is on the rise from 2019 — an outlook the EBRI branded "surprising to see given the current health and economic crisis impacting Americans."
Researchers have put this down to a belief that the pandemic will pass before it trickles into long-term financial security. They point to a March Economist/YouGov poll that suggested only 14% of Americans expected the current disruption to last a year or more.
Notably, the supplemental survey quizzed the extra 505 workers and 499 retirees between March 20 and 30, before the full effects of widespread stay-at-home orders were felt, and before unemployment reached record numbers.
Workers proved the most unsettled, however, as their confidence seemed closely woven with changes in their employment status — something 45% said they expected to happen in the next six months. Confidence was lowest among employees expecting or already experiencing a change for the worse, as they were more skeptical about issues such as having enough money to live comfortably in retirement and for the rest of their lives.
In January, 33% of workers reported feeling very confident about handling basic expenses, but that had dropped to 24% by March. Meanwhile, workers' confidence in covering medical expenses and in having enough money to last their whole life both fell to 17%, compared to 22% two months earlier. Likewise, March more retirees in March reported seeing a jump in long-term care expenses and higher spending on helping family members.
Workers and retirees unsurprisingly ranked health care their top issue. The economy was next in line, but the workforce was significantly more worried about that than retirees. The groups also held differing views on the political environment, as almost twice as many retirees called it a major issue than workers. Both ranked retirement readiness last in line.
But most workers expressed a desire for help with investment plans, with 68% preferring their employer to "do-it-with-me" or "do-it-for-me" through online tools or professional guidance. The vast majority also said they want education on managing competing financial priorities, and for employers to offer match contributions to retirement plans if workers make a student loan payment.
EBRI teamed with independent research firm Greenwald & Associates for the survey.
Raychel Lean reports on South Florida litigation for the Daily Business Review. Send an email to [email protected], or follow her on Twitter via @raychellean.
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Raychel Lean
Raychel Lean is ALM's Florida bureau chief, overseeing the Daily Business Review. Email her at [email protected] or follow her on Twitter via @raychellean.
