Webinar explores impact of COVID-19 on retirement savings

Before the pandemic, saving for retirement was, for some folks, like learning a new dance from a TikTok video: It looked easy, but getting it down was challenging. Then COVID-19 hit, and millions (especially women) found themselves out of work as businesses were forced to close. Surviving day to day became the new dance to learn, and saving for retirement took a back seat.

In this changed economy, 27% of workers have less than $25,000 in savings, 46% have less than $100,000, and 21% of workers haven’t started to save, said Richard Eisenberg, managing editor at Next Avenue.

Eisenberg was one of three speakers at Consumer Action’s May 20 webinar, “The Impact of COVID-19 on Retirement Savings,” presented as part of our COVID-19 Educational Project. Vickie Elisa, financial literacy educator for the Women's Institute for a Secure Retirement, and Dana Pollard, managing director of investments at Wells Fargo Advisors, joined Eisenberg in explaining the importance of consumers staying on track with retirement savings, or getting back on track as they recover from a loss of income due to COVID-19.

Despite the figures, the 2021 Retirement Confidence Survey, conducted in January by the Employee Benefit Research Institute, reveals that consumers are confident about having enough money to live comfortably in retirement, with 72% of workers feeling confident (a three-point increase from 2020). As to whether their confidence is realistic, Eisenberg told the audience it depends on whom you ask. For some consumers, saving money on travel and entertainment during COVID helped to increase their retirement savings, but for other consumers, the loss of jobs and income made saving for retirement a distant memory. It’s the same old story, said Eisenberg, of the “haves and have nots.”

Elisa encouraged the audience to ask themselves why women need to think about retirement differently than men? She explained that at age 65, there are 5.8 million more women than men. When you look at seniors 85 or older, 67% are women, and this group, referred to as the “oldest old,” is expected to double or even triple over the next 30 years. The most important fact about these women, pointed out Elisa, is that they are most likely to end up in poverty, even if they were not poor when they were employed. Elisa then provided tips that anyone can use to improve their financial future. She stressed the importance of taking part in financial decisions with a partner or spouse; avoiding debt; and making the most of job-related benefits by putting enough into a workplace retirement plan each pay period to get the maximum employer match and carefully selecting from the plan investment options.

Pollard had a simple message for the audience: Take a look at your own situation and let it inform your decisions. She said that because, generally speaking, we’re going to live a long time, it is going to take more assets than most people can fathom to live comfortably in retirement. Key steps to preparing for retirement include figuring out how much it costs you to live now and potentially in retirement, reducing debt, funding an emergency savings account (to keep you from having to take on debt to handle emergency expenses), and investing some of your assets based on the advice of a reputable financial planner so that your savings can beat inflation.

The retirement savings webinar, funded by the Wells Fargo Foundation and led by Consumer Action’s Outreach team, drew 160 attendees; it can now be viewed on demand on Consumer Action’s YouTube channel.