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The COVID-19 crisis has affected the way many Americans save for retirement, and there are surprising differences between age groups, genders, and even geographic regions.
A new survey by The Penny Hoarder shows that nearly 17% of Americans say they save less for retirement due to the pandemic. The survey also found that 16% of respondents are saving for COVID-19 More money. The survey surveyed 1,001 people in October 2021.
Geographical difference
According to Penny Hoarder, from a regional perspective, people in the Northeast are more likely to save extra money for retirement in response to the pandemic, at 44%.
Men in the Northeast say they are more than three times more likely to save for retirement than women in the Northeast.
Southerners are most likely to report that their retirement savings have not changed, about 32%, while 31% of Southerners said that their savings now have decreased due to the COVID-19.
Compared with other parts of the United States, the disruption of tourism may lead to a slower economic recovery in the South. For example, in Orlando, Florida—approximately one in five employees worked directly in the hotel and leisure industry in 2019—the unemployment rate is still much higher than the 2020 national average.
Other economic factors—including a state’s median wage, unemployment rate, and overall cost of living—can affect how much one state can save for retirement compared to another.
Gender differences
In response to COVID-19, men are more likely than women to increase their retirement savings: 59% of men save more, compared with 41% of women.
Figures before the pandemic have shown a huge gender gap in retirement savings. A 2019 Bank of America Merrill Lynch Workplace Welfare Report found that women earn $70,000 less when they enter retirement than men.
But the epidemic has brought new challenges to working-age women, especially women with children.
Childcare costs are a major financial burden for many American families.
A sort of September 2021 survey Author: The Penny Hoarder survey of 2,000 parents found that nearly one in five parents said they had to quit their jobs due to the high cost of childcare — they found that leaving the labor market altogether makes more sense than paying for day care or babysitting .
Women are also more likely to work in industries most affected by the COVID-19 closure, such as hotels and retail.According to the report, the unemployment rate of women was higher than that of men throughout the pandemic Bureau of Labor Statistics.
Since most Americans use employer-sponsored tools—such as pensions and 401(k)—to save for retirement, reduced labor participation makes it particularly challenging for women to increase savings.
Age difference
35% of millennials are the age group most likely to save more for retirement in response to COVID-19, between the ages of 25 and 34.
At the same time, those with the shortest retirement time experienced the greatest decline. Nearly a quarter of GenXers between the ages of 45 and 54 said their savings have decreased due to COVID. Another 27% of GenXers said that the pandemic has no impact on their retirement savings.
People aged 45 to 54 in the same age group are least likely to increase their savings due to COVID, at only 19%.
Saving for retirement is crucial – even during the pandemic
Retirement is expensive-long before the pandemic, Americans have been trying to save enough money for retirement.
The economic turmoil caused by the epidemic highlights Some important lessons Regarding long-term investment, it includes staying calm in a turbulent market and using market downturns as investment opportunities when prices are low.
Not all Americans are in the same pandemic recession ——The new data from The Penny Hoarder also highlights the degree of imbalance in the recovery.
Regardless of your age or stage of life, saving money for retirement is crucial. If you are in your 20s, saving now will pay huge dividends later. If you are in your 50s, it is not too late.This is a comprehensive guide for penny hoarders How to save for retirement At any age.
Method: Penny Hoarder used a Google survey to conduct a national survey of the impact of COVID on retirement savings. Between October 5 and 7, 2021, 1,001 people completed the survey. The survey responses are weighted so that each response represents the U.S. population.
Rachel Christian is a certified personal finance educator and a senior author of The Penny Hoarder.
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