Decisions to postpone retirement due to COVID-19 vary by U.S. city

Three in 10 respondents planning to retire said they were thinking about pushing back their retirement, a recent survey found, showing how the coronavirus pandemic has spurred considerations among working adults to consider retiring later, as the crisis has contributed to a loss of investment value and a reduction in savings. But considerations about retiring later due to COVID-19 varied regionally, according to the report from Edward Jones and Age Wave. More than 30% of respondents in Los Angeles, Dallas and Raleigh said they were considering postponing their retirement start date. That’s compared to less than 25% in cities including Portland, Kansas City and Cleveland.

The report said working adults in Kansas City and Atlanta “who plan to retire are the most confident in how much they are saving for retirement (55% for both vs. 65% nationally). By comparison, the report said, “adults in Dallas who are retired or plan to retire are more likely to harbor a variety of financial worries about retirement, including healthcare costs (60% vs. 53% nationally), outliving their savings (47% vs. 39%), inflation (33% vs. 26%), and tax increases (31% vs. 24%).”

Overall, there was a general lack of confidence among respondents planning to retire that they are saving enough for retirement, the survey said.

The survey also said that nearly 70% of those planning to retire in the next decade had not determined what the costs in retirement will be for long-term care and health care.

According to the survey, the coronavirus crisis has been less a disruption emotionally on older generations than younger. Fifteen percent of baby boomer respondents reported mental health declines, compared to 37% for Generation Z and 27% for millennials.

“Millennials are now at risk of falling further behind because they entered the pandemic in a weaker position than older Americans,” according to a recent Wall Street Journal report, which cited research from the St. Louis Fed that said “roughly 1 in 6 say they would be completely unable to pay for a $400 emergency expense.”

“We’ve certainly seen COVID-19′s disruptive force on finances, with the pandemic influencing retirement timing and financial confidence,” Ken Cella, Edward Jones client services group principal, said in a statement. “However, this cloud has brought several silver linings in terms of family closeness and important discussions about planning earlier for retirement, saving more for emergencies and even talking through end-of-life plans and long-term care costs.”

The survey showed that being actively engaged in personal financial decision-making contributed to retirees having a higher quality of life. “As a result, they are also more able to draw retirement income from a variety of sources, such as personal savings and retirement accounts, so they are less reliant on Social Security as the sole source of retirement funding,” the report said. “Even though retired, they still make short-term financial adjustments along the way while keeping an eye on longer-term goals.”

The study from Edward Jones and Age Wave—titled “The Four Pillars of the New Retirement”—surveyed thousands of adults in the U.S. and Canada. Subject-matter experts were interviewed as part of the nine-month investigation. The report identified the key pillars of retirement as health, family, purpose and finances.

READ MORE:

• Re-visiting retirement plans in a post-COVID world
• The millennial, boomer, Gen X and Gen Z-er mistake employers and advisors make
• How COVID-19 could be a financial wellness springboard

Mike Scarcella is a senior editor at Law.com in Washington. Contact him at mscarcella@alm.com and on Twitter @MikeScarcella.