COVID-19 scrambles retirement planning, but many keeping eye on ball

The coronavirus pandemic broadly disrupted industries and workplaces across the country and globe, forcing many working Americans to closely examine their financial stability in a time of crisis and their ability to prepare adequately for retirement.

A new survey from Voya Financial found 54% of respondents said they were now planning to work in retirement as a result of the coronavirus crisis. Still, saving for retirement, according to the consumer survey, remained a top priority for more than half of the respondents who participated in the survey from March to July.

“While we know many are having to address financial challenges due to COVID-19, it is a positive to see that the majority see the value in saving for a secure financial future,” Charlie Nelson, CEO of retirement and employee benefits for Voya, said in a statement. Nelson added that “Voya’s own participant data shows signs of a focus on the long term: Of those participants in Voya-managed retirement plans who recently changed their savings rate, nearly 70% increased their contributions.”

The data showed a “long-term view” approach to retirement planning savings across generations, including “those with a longer retirement horizon,” Nelson said. He continued: “While the majority of generations have seen challenging times and volatile markets before, the findings of our survey and our own data show an even greater opportunity for employers to help their employees address both short- and long-term needs.”

Meanwhile, the financial services company Ascensus said it has seen signs of recovery in the retirement savings market, as some employers move to reinstate matching contributions that had been paused at the start of the pandemic.

Ascensus said its data showed “the vast majority of savers made no change to their savings rates, illustrating the positive value of automatic payroll deduction.” Less than 2% of savers were no longer receiving contributions to their retirement account, Ascensus said.

“Individuals continue to make relatively lower one-time 529 account contributions compared to last year, but they’re also refraining from withdrawing existing savings as they determine what the outlook will be for their beneficiaries’ education plans,” Ascensus said in its new “State of Savings” report. “The number of debit card transactions from consumer-directed healthcare accounts spiked above projections for the month of July, as individuals tapped into their health savings to access services from their healthcare providers who might have previously experienced business closures or delays in service.”

Read more:

• Despite debt and reliance on Social Security, retirees are hanging in there
• COVID-19 economy pushing workers into early, involuntary retirement
• Building better retirement systems in wake of COVID-19: Wharton’s Mitchell has ideas

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