Loss of income and diminished savings options could be a setback for anyone who hopes to retire
Remember when Americans struggled to save for retirement because they were juggling high housing costs, student loan payments, credit card debt and scanty access to workplace savings? Add in a global pandemic, record unemployment and an economic lockdown. How’s that for a retirement crisis?
“Everything is going to have a negative impact on retirement security,” said Alicia Munnell, director for the Center for Retirement Research at Boston College. The market is down — so 401 account holders will see a decline in assets. Unemployment is up, so people will be halting contributions to their 401 plans, or using those funds. “They may be forced to tap into their savings,” she said. “The CARES Act made it easier but that should be a last resort.
But it’s not all doom, said Andrew Biggs, resident scholar at the American Enterprise Institute. The coronavirus does hit the country and its retirement savers hard, but Americans are not in as much trouble as many think, he said, and people will bounce back after this health and economic crisis, just as investors have after past recessions. “It’s all about context,” he said. “It’s important to look where people stand today versus previous years.
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