While it seems clear the pandemic has caused financial strain to many, a new study suggests there are signs of hope when it comes to retirement planning activity.
According to Allianz Life’s 2021 Retirement Risk Readiness Study, nearly half (49%) of respondents to the firm’s survey said they cannot even think about saving for retirement now because they are just trying to get by day-to-day and 56% said that stock market swings are making them nervous about their retirement savings. However, nearly two-thirds (65%) say they are now paying more attention to what they are saving and spending.
Moreover, the pandemic apparently has motivated those nearest to retirement to review their current retirement planning activity more often. These near retirees are more active in pursuing a variety of strategies, including:
- saving enough in a retirement account (29% versus 23% in 2020);
- diversifying their retirement savings (42% versus 27% in 2020);
- researching expenses and risks associated with retirement (43% versus 35% in 2020);
- making a formal plan with a financial professional (37% versus 29% in 2020); and
- purchasing a product that provides a guaranteed source of retirement income (38% versus 30% in 2020).
Rise in Unexpected Retirement
The survey also found a “troubling rise” in early retirements and that most are unprepared for the risk. According to the findings, more than two-thirds of respondents (68%) said they retired earlier than expected—up from 50% who acknowledged earlier-than-expected retirement in last year’s study. And similar to 2020, the majority said they had to retire for reasons outside of their control, including health care issues (33%, up from 25% in 2020) and unexpected job loss (22%, down from 34% in 2020).
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