The effects of COVID-19 and economic concerns are causing some workers to delay retirement and some retirees to head back into the workforce.
Published May 4, 2023 | By: Ginger Christ
- The confidence workers and retirees have that they’ll have enough money for retirement fell starkly in 2023 — a level of decline not seen since 2008 during the Great Recession, according to the 33rd annual Retirement Confidence Survey released April 27 by the not-for-profit Employee Benefit Research Institute and research firm Greenwald Research.
- Of the 2,537 surveyed in early 2023, 64% of workers believed they would be able to live comfortably in retirement, down from 73% in 2022, and 73% of retirees shared that confidence, a drop from 77% last year. Workers and retirees attribute their concern to having little or no savings, inflation and debt, the survey found.
- “The confidence both workers and retirees have in their ability to finance their retirements dropped significantly in 2023. … This shows that the current economic climate, in particular inflation, is eroding the confidence that Americans had in their retirement preparations going into the pandemic,” Craig Copeland, director of wealth benefits research at EBRI, said in a news release.
The effects of the COVID-19 pandemic and economic concerns are causing some workers to delay retirement and some retirees to head back into the workforce.
Seventy-one percent of the 2,002 respondents in a survey commissioned by 401(k) plan provider Human Interest said the pandemic changed their target retirement age. Among those who had a “very difficult time” during the pandemic, 71% said they plan to delay retirement.
“With the pandemic’s after-effects and ongoing inflation, people have had a revelation about retirement,” Eric Phillips, senior director of partnerships and strategic insights at Human Interest, said when the results were released in November. “In the past three years, 42% of employees with a retirement benefit at work say they saw their employer contribution get cut.”
Some workers are turning to pre-retirement, a transition period between full-time work and retirement, the survey found.
On the other side, some retirees are rejoining the workforce. Twenty percent of respondents to a Resume Builder poll last year said they planned to return to work that year. Sixty-nine percent attributed that decision to rising costs.
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Source: HR Dive