Impacts On Retirement Security
Today we’re going to explore a new study released by nonprofit Transamerica Center for Retirement Studies which examines the impacts of the pandemic and the retirement outlook of Generation Z, Millennial, Generation X, and Baby Boomer workers.
And here to help us understand the key findings of the report, entitled Living in the COVID-19 Pandemic: The Health, Finances, and… Retirement Prospects of Four Generations, is Catherine Collinson, CEO and president of nonprofit Transamerica Institute®.
So, Catherine, what did you consider the report’s most critical findings to be?
Catherine Collinson: Well Al, when we conducted this research in late 2020, 84 percent of employed workers cited one or more causes of anxiety. These range from health, family, financial, and employment-related concerns to uncertainty about the future. Concerningly, we found that Generation Z and Millennials are far more likely to be concerned about their mental health than Generation X and Baby Boomer workers.
Al Waller: Well…given that the Millennials and Gen Z’s are both closer to the early stages of their career vs. say…entering retirement, that’s not altogether surprising. Regardless, COVID really has impacted a large range of aspects in people’s lives. So then, what are the implications for everyone’s financial future?
Catherine Collinson: Only about 1 in 4 workers are very confident that they will be able to fully retire comfortably. We also found that, as workers get older, they are more likely to expect to work longer, with 72 percent of Baby Boomers either expecting to or already working past age 65 or not planning to retire at all. The survey also found some glimmers of good news in that 82 percent of workers are saving for retirement through employer-sponsored plans, such as a 401(k) or similar plan, and/or outside the workplace.
Al Waller: Well, given the magnitude of those challenges, it's remarkable that so many have remained focused on saving for retirement. But as you’ve noted, the risk of not having saved enough for retirement is still there. Then, how do we go about improving retirement security for all workers?
Catherine Collinson: Increasing retirement security will require a concerted effort among workers, employers, and policymakers. Workers should pay close attention to their finances and, if they haven’t already, create a financial plan that covers short-term goals and long-term retirement savings needs. Employers can support their employees in doing so by enhancing their employee benefits, including retirement, and health and welfare benefits. At a societal level, we need to encourage policymakers to build on legislation already in place, implement additional reforms, and preserve safety nets such as Social Security and Medicare. As we emerge from the pandemic, we have an unprecedented opportunity to strengthen the fabric of our retirement system.
Al Waller: Well Catherine, thanks as always, for sharing your insights with us. You can view the full research report at transamericacenter.org.
That’s all we have time for here on ClearPath – Your Roadmap to Health and Wealth. This is Al Waller on WYPR, your NPR news station. Thanks for listening.
Clearpath is paid for by the Transamerica Institute.