About 50% of recently unemployed Americans with retirement savings already have removed funds from their retirement savings accounts or plan to do so soon. That’s according to a Bankrate survey of more than 1,300 working or recently employed adults. The survey also found that nearly one-in-five Americans have reduced retirement fund contributions since the pandemic began.
Although any dip into a retirement account can be detrimental for an individual’s ability to afford long-term care in the future, baby boomers may be hit hardest from tapping their accounts early during the current economic crisis. The survey showed that roughly 10% of boomers already have used some of their retirement savings to replace their incomes since the coronavirus crisis started. That’s compared with about 20% of the millennial and Generation Z respondents.
About 16% of boomers are contributing less to their retirement than before, however, and 23% were not contributing before or now. Only 2% are contributing more since the crisis began, whereas 58% are saving the same.
“The runaway culprit is loss of income, cited nearly twice as often as the next most common reason: keeping more cash on hand,” said Greg McBride, CFA, Bankrate chief financial analyst.
