MILWAUKEE, October 5, 2021 / PRNewswire / – New research from Northwestern Mutual shows that Covid-19 has changed the retirement plans of many Americans, with more than a third (35%) saying it has either increased or pushed back their target age by retirement. Almost a quarter (24%) plan to retire later than expected, while 11% plan to retire earlier.
Notably, the results also reveal that the two youngest generations of adults plan to retire before age 60 – Gen Z at 59.4 and Millennials at 59.5. Overall, the average expected retirement age is 62.6, down slightly from 63.4 last year.
“The economic environment created by the Covid-19 pandemic has caused many people to reexamine their financial lives,” said Christian mitchell, Executive Vice President and Chief Client Officer at Northwestern Mutual. “For some, the prospect of early retirement seems more attainable, while others adjust to delays. In either case, having a holistic plan is essential to navigate uncertainty and achieve your goals.”
For those planning to delay retirement due to the economic impacts of the pandemic, most (39%) say they will postpone their retirement for three to five years. But more than a third (35%) say their retirement schedule has slipped more than 10 years.
The top reasons cited for why people delay retirement include:
- Wanting to work and save money with additional flexibility with their workplace – 55%
- Concerns about rising costs like healthcare and / or unforeseen medical bills – 50%
- Having to dip into retirement savings – 24%
- Take care of a relative / friend; responsible for additional dependents – 14%
Of those planning to retire earlier than expected, almost half (48%) say they are three to five years ahead of schedule.
The main reasons cited for raising the target retirement age are as follows:
- Wanting to spend more time with loved ones – 42%
- Focus on hobbies / priorities outside of work – 33%
- Achieving personal mission is more important than saving more – 29%
- The work situation has changed (layoff, etc.) – 28%
“Planning is not a one-time exercise,” Mitchell said. “It requires ongoing maintenance and the flexibility to respond to changing circumstances. With so many people revising their financial timelines this year, active planning should be a priority. It requires attention, commitment and a willingness to act, and the support of a trusted advisor is essential in this process. “
Save more, need more
On average, people have $ 98,800 saved for retirement, up to $ 87,500 Last year. At the same time, people’s expectations of how much money they will need to retire comfortably are also on the rise. $ 950,800 in 2020 at $ 1,047,200 in 2021.
While overall retirement savings are on the rise, more than four in ten (43%) think they could outlive their savings, up slightly from 41% last year.
However, the data also shows that people are taking proactive steps to address this concern, including:
- Increased savings – 29%
- Developing a Financial Plan – 22%
- Discuss options with their family – 18%
- Purchasing investments – 18%
- Seek advice from a financial advisor – 18%
When it comes to funding their retirement, people plan to rely the most on their 401k (26.5%), Social security (26.5%) and personal savings or investments (23.8%). However, nearly a fifth (19%) of people say that social security is unlikely to be available to them when they retire, and 43% say they can imagine a time when Social Security does not. ‘will no longer exist.
“It’s clear that plans can change unexpectedly. That’s why it’s so important for people to start early when it comes to planning for retirement,” Mitchell said. “Defining a goal and defining the steps to achieve it will contribute to accountability and flexibility. And while retirement may be a moving target for some, we’re seeing improvements in the way people prepare for their financial futures, and that’s a good thing. . ”
About the 2021 Mutualité du Nord-Ouest planning and progress study
The 2021 Planning and Progress Study was conducted by The Harris Poll on behalf of Northwestern Mutual and included 2,320 US adults aged 18 or older who participated in an online survey between March 16 – 26, 2021. Results have been weighted according to census targets for education, age / sex, race / ethnicity, region and household income. Propensity score weighting was also used to adjust respondents’ propensity to be online. No estimate of the theoretical sampling error can be calculated; a full methodology is available.
About Northwestern Mutual
Northwestern Mutual has been helping individuals and businesses achieve financial security for over 160 years. Through a holistic planning approach, Northwestern Mutual combines the expertise of its financial professionals with a personalized digital experience and cutting-edge products to help clients plan what matters most. With $ 308.8 billion in total assets, $ 31.1 billion in income, and 2,000 billion dollars value of life insurance protection in force, Northwestern Mutual provides financial security to over 4.75 million people with life, disability and long-term care insurance, annuities and services brokerage and consulting. The company manages more than $ 200 billion investments held by its clients and held or managed through its wealth management and investment services activities. Northwestern Mutual ranks 102 on the FORTUNE 500 2020 ranking and is recognized by FORTUNE® as one of the “World’s Most Admired” Life Insurance Companies in 2021.
Northwestern Mutual is the trading name of The Northwestern Mutual Life Insurance Company (NM), Milwaukee, WI (life and disability insurance, annuities and life insurance with long-term care benefits) and its subsidiaries. The subsidiaries include Northwestern Mutual Investment Services, LLC (NMIS) (securities), securities broker, registered investment adviser, member of FINRA and SIPC; Northwestern Mutual Wealth Management Company® (NMWMC) (fiduciary and fee financial planning services), federal savings bank; and Northwestern Long Term Care Insurance Company (NLTC).
SOURCE Mutual of the North-West