Pandemic has disrupted retirement plans for 35% of Americans, study finds
The Covid-19 pandemic has been a financial boon for some and a catastrophe for others.
Now those effects are showing up in one more place: anticipated retirement dates.
The pandemic has prompted 35% of Americans to change the age when they anticipate retiring, a recent survey from Northwestern Mutual found.
More from Personal Finance:
If you’re part of the ‘Great Resignation,’ here are some 401(k) tips
How much do I need to retire? Top financial advisors weigh in
Single people are worse off financially, study shows
Of those respondents, 24% said they plan to retire later than they did before the pandemic. Meanwhile, 11% said they plan to retire earlier.
Those who put off their retirement date mostly said they planned to do so by three to five years, with 39% of respondents. However, coming in a close second, with 35% of respondents, was a timeframe of more than 10 years.
Those who moved their retirement dates sooner also mostly planned to do so by three to five years.
Notably, the average anticipated retirement age has also shifted, according to Northwestern Mutual’s survey.
The average age at which people expect to retire is now 62.6, versus 63.4 as of last year.
The expectations vary significantly by generation. Gen Z and millennials anticipate retiring at 59.4 and 59.5, respectively.
Meanwhile, Gen X anticipates retiring at 64.3, while baby boomers expect to push their retirement age to 68.3.
Admittedly, it can be difficult to time your retirement, regardless of whether you want to retire earlier or later.
“Sometimes retiring later than planned can be much more difficult in practice than it is in theory,” said Christian Mitchell, executive vice president and chief customer officer at Northwestern Mutual.
Issues with a worker’s own health, the need to care for a loved one or a tough job market could force them to retire earlier than planned, he said.
The fact that younger workers anticipate retiring earlier signals that attitudes towards careers and retirement are changing, Mitchell said. For those cohorts, having multiple careers and taking sabbaticals will be more common, and that carries over into expectations around retirement.
One bright spot from the survey is people now have $98,800 on average saved toward retirement, up from $87,500 last year.
Yet that’s still a long way from how much respondents said they anticipate they will need to comfortably retire — $1.047 million, up from $950,800 last year.
That shortfall signals the importance of working with a financial advisor to help think through all of the possible futures and how to prepare for them, Mitchell said.
“You really need someone who is expert and steeped in all of this to help you through those big decisions,” Mitchell said.