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Although the emphasis has been on physical and mental health, the pandemic also has taken a toll on the financial health of many Americans.
Early in the outbreak, MagnifyMoney found that three in 10 Americans had withdrawn money from their retirement accounts. One in four said they plan to delay retirement, including 42 percent of those who lost income during this period.
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MagnifyMoney recently surveyed more than 2,000 consumers, more than half of whom have retirement savings accounts, to learn the continued impact of the crisis on Americans.
On a positive note, 41 percent of respondents said the coronavirus pandemic didn't affect their retirement savings. In fact, 11 percent of consumers said they were able to increase contributions.
However, the other 48 percent of respondents have either stopped contributing or decreased contributions for a period or altogether. Of this group, 20 percent said they've resumed or increased contributions, 16 percent haven't started saving and 12 percent haven't increased their amount after decreasing it.
Among the other key findings:
While some consumers tapped their retirement savings for extra cash, the majority regret doing so and have begun replenishing their savings. Seventy-seven percent of those who took money from their account at least somewhat regret it, and about three-quarters already have begun paying themselves back.
A portion of Americans said they already were behind in saving for retirement before the pandemic hit. Nearly three in 10 said this was the case, not even accounting for the global crisis.
Likewise, 59 percent of consumers feel like they'll never catch up to where they need to be. Some Americans now plan to retire later — especially those who lost income during the pandemic.
Twenty-five percent of consumers said they'll likely need to retire later. That figure jumps to 42 percent among those who lost income during the crisis.
Lack of income is the biggest barrier consumers face when it comes to saving for retirement.
Nearly two-thirds of Americans surveyed named at least one barrier they're facing. Not making enough money took the top slot by a landslide.
MagnifyMoney offered several tips for getting retirement savings back on track:
Keep your eye on the prize. Retirement might seem far off when you're early in your career or when you could use some extra cash. But "withdrawing early can mean having to work a lot longer before being able to retire or having to save extra before retirement to make up ground," said Ismat Mangla, MagnifyMoney's content director.
In other words, the long-term impact of dipping into retirement savings could be worse than alternatives. A financial advisor could help you keep your priorities in check.
Read the fine print. When it comes to retirement savings, consumers should be aware of any tax implications for withdrawals and contributions. Although the CARES Act exempted some retirement borrowers from the additional 10 percent early withdrawal tax, they still could be on the hook for federal income tax if they don't pay back the balance within three years.
Work ahead. Aggressively saving for retirement as early as possible might mean living on a tighter budget than you may want in your youth. But the extra effort could pay off with a secure and enjoyable retirement rather than having to work in retirement or struggle on a fixed income. If you had to borrow from retirement savings, it's prudent to pay it back as soon as you can.
"Start setting aside extra money every month so that you're not faced with a giant lump sum to pay back all at once before the time period is up," Mangla said.
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Alan Goforth
Alan Goforth is a freelance writer in suburban Kansas City. In addition to freelancing for several publications, he has written a dozen books about sports and other topics.
