The coronavirus pandemic has destroyed the retirement plans of millions of Americans, many of whom drew into savings accounts earlier than expected as the crisis forced the nation’s economy to an unprecedented shutdown.
While most Americans plan to retire around 66, a new study published by Real Estate Witch this week revealed that about 40% of baby boomers have suspended their retirement plans due to the pandemic.
About 35% of survey respondents said they used their retirement savings to make ends meet during the pandemic, spending about 44% of what they had accumulated. Baby boomers said they spent a little more, saying 46% of their savings were used during the pandemic.
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“Baby boomers who plan to retire within the next decade face the challenge of closing serious gaps in their retirement funds,” the study said.
The youngest baby boomer will turn 55 this year, leaving him little time to catch up on retirement – especially as the pandemic has forced millions into early retirement. A study by Pew Research found that an additional 3.2 million baby boomers retired in the third quarter of 2020 compared to the same period in 2019, likely due to the historically high unemployment rate.
The average American has about $ 250,813 in reserve for retirement – well below the recommended figure of $ 465,000. Baby boomers saved an average of $ 296,064 for retirement, 36% less than the recommended level.
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Respondents who reported spending their retirement funds reported using between $ 10,000 and $ 14,999, but almost one in five said they spent more than $ 25,000 of their retirement savings.
Most Americans also significantly reduced the amount of money they contributed to retirement accounts during the pandemic: According to the study, most individuals cut their contributions by about 3%. But around 66% of those polled said they plan to return to their typical contribution level once the pandemic subsides completely.
“As more and more of America’s aging population retire, the country runs the risk of its aging population facing financial hardship in their later years – a problem that has been exacerbated by the pressure generalized financial pandemic, “according to the study.
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Yet some Americans have in fact profited from the pandemic, which has caused widespread gyrations in the stock market: some 2.7 million people aged 55 or over – most of them wealthy and white – are considering early retirement in because of stock market deals, according to government data.