NEW YORK — The 2008 recession was a tough time for millions. While many consider that economic meltdown to be the worst crash since the Great Depression, COVID-19 seems to be re-writing all the books when it comes to global disasters. With economies all over the world shut down, a survey finds most American adults see the current financial crisis as worse than the “great recession.”
More than half of the 2,000 adults between 40 and 65 years-old, making over $100,000 a year, see the impact of COVID-19 as more damaging than the crisis 13 years ago.
Commissioned by Edelman Financial Engines in late 2020, the survey also reports 59 percent of Americans based much of their vote in 2020 on the candidates’ COVID-19 response plans. Over seven in 10 people (72%) said concerns over their financial future dictated their vote in the U.S. presidential election. Another 64 percent named “economics” as the top policy topic that influenced their voting decisions.
It’s quite clear that money concerns are weighing heavily on Americans right now. While 88 percent of the poll are still saving for retirement, 24 percent have had to make fewer contributions than they planned since the pandemic began. Another 35 percent admit they don’t have enough savings in general.
COVID-era economy puts retirements in jeopardy
Among Americans contributing to a retirement fund, one in four have had to dip into that account to help cover costs during the pandemic. The average American says it will take six years to re-coup those lost savings. One in two people spent some retirement money early to pay bills. Meanwhile, nearly four in 10 (39%) gave some money to a friend or family member in need. A third had to use their retirement savings due to an emergency.
Another common theme among many Americans is the regret that they didn’t started saving for retirement earlier. The average respondent started to save around 30 years-old, but most said they wish they had started a decade earlier.
Among Americans who still aren’t saving for retirement, 80 percent said that choice is a big regret. When those individuals were asked why they had never saved, two in five said it was because their employer had never offered retirement plans. A third of the poll could not afford to make regular retirement contributions and 16 percent just didn’t want to get involved with retirement planning.
Here’s an especially sobering statistic; just under half (49%) don’t think they’ll ever be able to retire “given the state of the world.”
While most Americans (74%) say they’re investing for retirement, 47 percent of that group is not working with a qualified financial advisor.
“As we’ve seen this year, market volatility can hurt investment values in the short term. Savvy investors recognize the importance of maintaining a long-term view,” Ric Edelman, founder of Edelman Financial Engines, says in a statement.
TOP REASONS FOR RESPONDENTS TO INVEST:
- Retirement 74%
- Prepare for a “rainy day” 27%
- Pay for vacation 15%
- Buy a car 15%
- Pay for college 14%
- Buy a house 13%
- Start a business 11%
- Pay for a special event 9%
- Pay for a wedding 6%
The survey was conducted by OnePoll.