1 in 5 Americans Have Delayed or Cancelled Their Retirement Due to the Pandemic, Survey Finds
The COVID-19 pandemic has shaken many U.S. adults’ confidence in retiring comfortably or on time, with one-in-five (19%) reporting it has forced them to delay their retirement or no longer retire at all, according to the new 2021 Tax-Efficient Retirement Income survey.
Conducted by The Harris Poll on behalf of The Nationwide Retirement Institute, the study also found one-fourth (27%) of Americans have saved less or stopped saving for retirement because they lost their job or for other reasons.
In result, almost two-in-five Americans (37%) have or are likely to withdraw money from their retirement plan early because of the pandemic, and this percentage is even higher for millennials at 58%.
Overall, the study reveals younger adults have struggled with navigating their finances the most, with 62% of millennials and 51% of Gen Xers saying the pandemic has made their finances more complicated, compared to 27% of boomers.
“COVID-19 has many Americans feeling financially insecure — especially younger ones,” said Eric Henderson, president of Nationwide’s Annuity business. “This presents an opportunity for financial professionals to not only get clients back on track, but ensure they have the right tools and education on topics like taxes in retirement, which can get them closer to their long-term goals.”
The Education Gap on Taxes in Retirement
COVID-19 has put a needed spotlight on the critical role tax planning plays in reaching those long-term goals. Almost half (47%) of Americans expect their taxes to go up significantly in the next four years and the majority (62%) agree it’s more important than ever to minimize taxes now than in retirement.
They’re right to be vigilant — 42% of retirees say they didn’t consider how tax rates would affect their retirement income when planning for retirement and now 36% are terrified of what tax rates will do to their retirement income.
While most Americans agree they should minimize their taxes now, the challenge is many aren’t financially savvy enough to do this on their own — especially today.
Forty-two percent of all respondents say their taxes have become more complicated as a result of COVID-19, and this percentage jumps to 58% for millennials.
Only 58% of adults surveyed know how to use tax planning to get the desired outcome they want from the IRS during tax season.
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