How COVID-19 Impacted Retirement Savings

Add saving for retirement to the list of things that COVID-19 has impacted, according to a new survey from the personal finance website The Penny Hoarder.

The survey of more than 1,000 people in October found disparities in age groups, gender and even geographic areas in the way people are approaching retirement savings during the pandemic era. While overall a majority of those surveyed, 67%,  said they’ve made no change in how much they’re saving, the rest of the survey was split almost equally between those who said they were saving less (17%) and those who said they were saving more (16%).

The biggest disparities in the data occurred geographically with 44% of residents in the Northeast saying they were saving more for retirement, while only 18% in the West and Midwest saved more.

About 14% of respondents in the South said they were saving more while 31% said they were saving less. The Penny Hoarder attributed the small showing from residents in the South to disruptions in the tourism industry and lower median wages in Southern states compared with Northeastern states.

Gender differences were also revealed as 59% of men said they are putting more away for retirement compared with only 41% of women saying they were. Perhaps that’s not surprising given that women were more likely to work in sectors hardest hit by pandemic closings, such as retail and hospitality.

Unemployment rates for women were higher than men during the pandemic, according to the Bureau of Labor Statistics, and since most people save for retirement through employer-sponsored vehicles, participation rates faltered.

“Less workforce participation, makes it particularly challenging for women to boost their savings,” the survey concluded.

A similar survey in September of 2,000 parents found that nearly one in five said they had to quit a job due to high child care costs — “finding it made more sense to leave the workforce entirely than to pay for daycare or babysitters.”

Millennials were the age group saving more for retirement in response to the pandemic, the survey showed. Thirty-five percent of those saving more were between the ages of 25 and 34. Meanwhile, of those who said they were saving less nearly one fourth were members of Generation X, those between the ages of 45 and 54.

The website concluded its survey showing how Americans are struggling to save enough money, and were already having difficulties in saving before the pandemic hit. But also it shows how uneven the recovery has been.

“The economic turmoil of the pandemic underscored some critical investing for the long term, including keeping calm during turbulent markets and using market slumps as an opportunity to invest when prices are low,” The Penny Hoarder said.

Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].

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