Misgivings Easing About Pandemic’s Effect on Retirement Planning

Among the effects of the sudden economic downturn that the pandemic sparked are misgivings about retirement planning and financial prospects for retirement. But a recent report suggests that that sentiment and effect may be easing.

 

Confidence in the economy has been sliding this year, LIMRA reports. A favorable view of the economy stood at 56%, they say, but fell to 25% in March and 21% in May. They add that by May, two-thirds of those they surveyed believed that there will be a recession, although LIMRA observes that the National Bureau of Economic Research (NBER) suggests that they’re behind actual conditions and that a recession has held sway since February.

Jennifer Douglas, research director, LIMRA Research Quality and Performance, set the results in a broader context, noting that the current sentiments come in an environment of already existing concern about finances and widespread uncertainty regarding whether retirement savings will be adequate. She noted in a press release that their most recent consumer sentiment survey shows that “while the level of concern has fallen from March, a considerable number of Americans are worried about the impact of this recession.”

 

With decline of confidence in the economy, it should come as no surprise that LIMRA found perceptions concerning retirement planning and readiness also took a hit. For instance, LIMRA found in March that 50% of consumers believed that the economy was having a strong or very strong effect on the ability to retire.

 

But while LIMRA reports that confidence in the economy was even lower in May than in March, it also found that attitudes about the effects of the souring economy on retirement prospects were improving. In May, LIMRA found, fewer consumers than in March believed that the economy was having a strong or very strong effect on the ability to retire, when they would retire and sources of income during retirement.

 

Measure	% Believing the Economy Has a Strong or Very Strong Effect, March 2020	% Believing the Economy Has a Strong or Very Strong Effect, May 2020	Change in Believing the Economy Has a Strong or Very Strong Effect, March-May 2020
Ability to retire	50	41	—9
When to retire	41	35	—6
Sources of income during retirement	35	25	—10

 

LIMRA also found that a considerable number of employees want assistance in calculating key figures surrounding financial readiness to retirement and timing of retirement.

 

 

Measure	Approximate % of Employees Who Want Assistance With it
Calculating how much money is needed in retirement	46
Determing when retirement is affordable	42
Determining what expenses will be during retirement	39
Anticipating tax expenses in retirement	38