Pandemic's impact on retirement savings varies by geography, gender and age

Nearly every American has felt the impact of the pandemic on the ability to save for retirement.

“Retirement is expensive, and Americans were struggling to save enough money for it long before the pandemic,” according to a report from The Penny Hoarder on its recent survey. “The economic turmoil of the pandemic underscored some critical lessons about investing for the long term, including keeping calm during turbulent markets and using market slumps as an opportunity to invest when prices are low.”

Nearly 17 percent of Americans say they’re saving less money for retirement because of the pandemic, while 16 percent are saving more, according to The Penny Hoarder. However, the economic fallout has been far from uniform.

Geography. People in the Northeast were much more likely to save extra money for retirement in response to the pandemic than respondents in other regions, Among Americans who reported saving more, 44 percent live in the Northeast. The numbers tell a different story in the South. Among those who are saving more, just 14 percent live in the South, while 31 percent of people saving less are Southerners.

Disruptions in the tourism industry may be causing a slower economic recovery in the South than other parts of the United States. Other economic factors — including a state’s median wages, unemployment rate and overall cost of living — also affect how much someone can save for retirement.

Gender. Men were considerably more likely than women to beef up their retirement savings in response to COVID-19. Fifty-nine percent of men are saving more, compared to just 41 percent of women. Pre-pandemic numbers already pointed to a sizable gender gap in retirement savings. A 2019 Bank of America Merrill Lynch Workplace Benefits Report found that women enter retirement with $70,000 less than men.

The pandemic introduced new challenges for working-aged women, especially those with children. Women also were more likely to work in sectors hardest hit by COVID-19 shutdowns, such as hospitality and retail. Women also experienced higher unemployment rates throughout the pandemic than men, according to the Bureau of Labor Statistics.

Age. Millennials were the age group most likely to save more for retirement in response to COVID. Thirty-five percent of Americans who say they are saving more during COVID are aged 25 to 34. Meanwhile, those with the least amount of time until retirement saw the biggest slide. Of respondents who said they’re saving less, nearly a quarter are GenXers between 45 and 54, meaning they may have missed some of the post-pandemic market gains.

“No matter your age or stage of life, it’s critical to put money away for retirement,” the report concluded. “If you’re in your 20s, starting to save now will pay huge dividends later. If you’re in your 50s, it’s not too late.”