Despite debt and reliance on Social Security, retirees are hanging in there
However, 12% of retirees have no savings and no investments.
Most retirees are confident that the coronavirus pandemic won’t affect their financial stability, according to a September report from the Transamerica Center for Retirement Studies.
The study, Retirees and Retirement Amid COVID-19, found that 75% of retirees say their confidence in being able to maintain a comfortable lifestyle has not been shaken by the global health crisis.
Yet, 15% of retirees say their confidence has declined in light of COVID-19. A small percentage of retirees, 4%, report that their confidence has actually increased.
Although 69% of retirees say they will rely on Social Security as their primary source of income, the research uncovered that retirees have a diverse set of income drivers. In addition to Social Security, 40% of retirees say they have other savings and investments.
About 35% of retirees revealed that they expect income streams from 401Ks, 403bs and IRAs. Another 30% of retirees say they have company-funded pension plans. A comparatively lower percent of retirees, at 9%, cite home equity as a source of income.
Retirees also have an array of savings and investments to fall back on. More than three-fourths of retirees have checking accounts, with 62% maintaining savings accounts, the report states. Nearly half of retirees have equity in their primary residence. However, 12% of retirees have no savings and no investments.
Despite the rosy outlook on post-pandemic financial security, many retirees continue to pay off household debt. About 46% are paying off non-mortgage debt, such as credit cards,car loans, student loans and medical debt, and nearly a quarter have mortgage debt, according to the study. Roughly 32% of retirees have up to $10,000 in debt, and 14% have $10,000 worth of debt or more.
Transamerica recommends that policymakers address Social Security and Medicare funding issues for those that retire in the aftermath of the pandemic. “The sooner reforms are implemented to the programs, the more time people will have to make adjustments to their financial plans for retirement,” the report states.
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