Will COVID-19 deepen the retirement crisis? Yes and no — here’s how
The coronavirus crisis may worsen an already impending retirement crisis.
Remember when Americans struggled to save for retirement because they were juggling high housing costs, student loan payments, credit card debt and scanty access to workplace savings? Add in a global pandemic, record unemployment and an economic lockdown. How’s that for a retirement crisis?
The coronavirus poses a threat to many Americans’ health and current financial well-being, but it also has the potential to derail an individual’s future retirement security.
Many Americans were already underprepared for retirement, not having saved enough for their futures by the time they were ready to leave the workforce. The global pandemic may make it even harder to afford to retire. In the past four weeks alone, 22 million U.S. workers have filed for unemployment benefits, and people without jobs are not able to contribute to their workplace investment accounts, nor do they have any extra money to put away. People may also have to take distributions or loans from their retirement plans, which lowers their potential returns in the long-run.