Nearly Half of Millennials and Gen X Expect COVID-19 Will Impact Their Future Retirement Preparedness
A five-generation survey also reveals older generations and retirees did not experience a significant financial impact from the pandemic.
SCHAUMBURG, Ill., May, 19, 2021 – New retirement research from the Society of Actuaries (SOA) found that the COVID-19 pandemic led to decreased financial security and negatively impacted financial well-being more for Millennials and Gen X, compared to older generations, which may have ramifications on their retirement preparedness in the future. The SOA’s multigenerational survey, “Financial Perspectives on Aging and Retirement Across Generations,” examines financial challenges and perspectives on retirement planning. The research builds on a previous report from the SOA, which indicated Millennials face greater financial challenges than older generations, with the new research indicating that the pandemic may further compound their financial fragility.
The SOA’s survey, “Financial Perspectives on Aging and Retirement Across Generations,” revealed that 41% of Millennials and 39% of Gen Xers report that the pandemic had a “somewhat or significant negative financial impact,” compared to Late Boomers (33%), Early Boomers (29%), Silent Generation (25%). Additional key findings include:
- Retirement Preparedness: While the pandemic does not seem to have caused a significant increase in level of concern around retirement risks in general, many survey respondents are worried about the impact the pandemic will have on their retirement savings. This concern is greatest for Millennials (57%) and Gen Xers (49%), who are very or somewhat concerned with how the pandemic will impact their retirement savings, especially around maintaining their standard of living and not having enough money to pay for healthcare. This concern decreases for older generations (40% Late Boomers, 37% Early Boomers, 29% Silent Generation).
- Financial Security: Millennials (41%) and Gen Xers (39%) are more likely to say their feelings of financial security decreased during the pandemic, compared to older generations (Late Boomers 33%, Early Boomers 29%, Silent Generation 25%). Additionally, Millennials indicated they have shifted their priority to short-term financial goals, with nearly two-thirds (64%) of Millennials saying they tend to plan financially for less than one year in the future. Older generations are more confident in their financial security, including two thirds of Early Boomers who feel they are on track for a financially secure retirement.
- Managing Debt: For about half of Millennials (48%), debt is complicating their finances. Debt is also a problem for Gen Xers (35%) but is a much smaller issue for Late Boomers (20%), Early Boomers (16%) and the Silent Generation (14%).
- Job Disruption: It was most common for Millennials (40%) to experience job loss or a pay decrease during the pandemic, compared to other generations (33% of Gen Xers and 21% of Late Boomers). Additionally, 35% of workers across generations have changed or considered changing when they plan to retire as a result of COVID-19, with most of these respondents delaying their retirement.
“Younger generations have faced multiple financial crises early in their careers, between the COVID-19 pandemic and Great Recession. Our research indicates this is negatively impacting their financial well-being, and could ultimately impact their retirement preparedness down the line,” said Cindy Levering, ASA, MAAA, chair of the SOA’s Aging and Retirement Strategic Research Program. “These findings are particularly worrisome for Millennials, who are focused on short-term issues instead of longer-term goals like preparing for retirement and the risks that could arise. It may seem far away now, but the earlier you start planning for retirement, the more financially secure you’ll be in the future.”
In addition to this research, the SOA is also preparing a report on retirement preparedness of
African American, Asian American and Hispanic/Latino respondents. These reports are part of the SOA’s Aging and Retirement Strategic Research Program, which reviews the societal impact of aging populations and solutions for mitigating retirement risks.
For additional information, including the full “Financial Perspectives on Aging and Retirement Across Generations” research report, please visit soa.org/resources/research-reports/2021/generations-survey/.
The report presents research conducted by Greenwald Research on behalf of the SOA. An online survey was conducted and included 2,017 individuals: 406 Millennials, 405 Gen Xers, 402 Late Boomers, 403 Early Boomers, and 401 Silent Generation. The survey fielded from January 5–14, 2021. Data were weighted by gender, income, and education to reflect each generation’s composition.
About the Society of Actuaries
With roots dating back to 1889, the Society of Actuaries (SOA) is the world’s largest actuarial professional organization with more than 32,000 actuaries as members. Through research and education, the SOA's mission is to advance actuarial knowledge and to enhance the ability of actuaries to provide expert advice and relevant solutions for financial, business and societal challenges. The SOA's vision is for actuaries to be the leading professionals in the measurement and management of risk. www.soa.org.