How has COVID-19 Changed Retirement Planning?

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Earlier in May, Forbes Advisor conducted a YouGov survey of 9,675 U.S. adults to get a better idea of how people are managing their financial priorities during the current crisis. Nearly 72% of survey respondents made no changes to their retirement plans. The percentage skewed higher to 79% for those age 55 and older, while 61% of individuals age 25 to 34 reported they did make changes during this time.

More than 36.5 million Americans have filed for unemployment since the beginning of the crisis, so many U.S. adults are struggling financially. That said, most respondents indicated they had not made use of the changes outlined in the recent CARES Act. Only 4% have taken a loan from their 401k; 5% have taken a withdrawal from their 401k or IRA without the typical 10% penalty tax; and 5% are planning to skip a Required Minimum Distribution (RMD) this year. Those percentages skewed a little higher for survey respondents between ages 25 and 44, so more younger workers are making use of these adjustments.

When it comes to the timing of retirement, 11% of respondents indicated COVID-19 would require them to continue working for longer than they had planned, and only 1% of individuals age 55 and older said the crisis would force them to retire earlier than planned.

As the crisis continues, more U.S. adults may be required to alter their retirement plans. For now, however, financial professionals maintain patience is key. It’s best to ride out the market volatility if you are able to, especially if you’re not close to retirement age. Those investments will likely regain their value over time.

Read the full article from Forbes.