MINNEAPOLIS – Dec. 15, 2020 – As Americans continue to endure the health and economic impacts of the COVID-19 pandemic, the majority are concerned about continued market volatility in the year ahead. New findings from the Q4 Quarterly Market Perceptions Study from Allianz Life Insurance Company of North America show Americans are worried that markets will retreat from their recent highs, with 44% saying they feel the market hasn’t bottomed out yet, and nearly three-quarters (72%) believing the markets will continue to be very volatile in 2021.
As a result, the study indicated that fewer people say they are ready to invest now (25% compared to 29% in the last quarter). Even more indicative of the current financial predicament faced by many is that over one-third (34%) say they have had to dip into their retirement savings because of the impact COVID-19 has had on the economy.
“We’ve watched as the pandemic continues to wreak havoc on peoples’ financial and retirement strategies whether that is from unexpected job loss or early withdrawal of retirement assets,” said Aimee Johnson, vice president of Advanced Markets and Solutions, Allianz Life. “It’s clear that people remain nervous about market risks and how their finances will continue to be impacted not only in 2021, but for many years ahead.”
As the pandemic drags on, over half (53%) say COVID-19 is having a negative effect on financial retirement plans, and one-third (33%) say they do not feel financially prepared to ride out the economic impacts of COVID-19.
Millennials have been hit hardest during the pandemic, with almost half (48%) saying they have had to dip into their retirement savings (compared with 32% of Gen Xers and 22% of baby boomers). Further, half have also either stopped or reduced retirement savings (compared with 41% of Gen Xers and 36% of baby boomers).
Despite the current harsh realities of the pandemic, there is still hope for what next year will bring. The study found that 66% say they think the economy will improve in 2021, and another 67% say they think their financial situation will ultimately improve.
Looking to next year, many Americans say they have learned some lessons in 2020, with 67% saying the impacts of COVID-19 on the economy have made them rethink how to protect their retirement savings. And if market volatility persists in the coming year, over half (56%) believe they will have to adjust their retirement strategy.
“While many of us are ready to leave 2020 behind, we shouldn’t forget some of the things we can take away from this unprecedented year, including how to prepare for and manage risks within a retirement strategy,” added Johnson. “Taking steps to help mitigate these risks now can make a big difference in both the long- and short-term as we wait to see what 2021 has in store for us.”
Allianz Life conducted an online survey, the 2020 Q4 Allianz Life Quarterly Market Perceptions Study in December 2020 with a nationally representative sample of 1,003 respondents age 18+.
Allianz Life conducted an online survey, the 2020 Q3 Allianz Life Quarterly Market Perceptions Study in August 2020 with a nationally representative sample of 1,004 respondents age 18+.