Although stocks have surged from their March lows, many investors still worry if they’ll be able to put enough money away for retirement.
Brokerage firm TD Ameritrade said in a report released Thursday morning that seven in 10 Americans expect their retirement plans to take a hit from the Covid-19 outbreak.
Gen Xers – the group sandwiched between baby boomers and Millennials – are feeling the most pressure. Nearly 40% of the Generation X members said they are considering delaying retirement.
More than half of all the people surveyed also said they would consider looking for a job after they are retired. And nearly 30% said they are thinking about taking out or already have withdrawn money from 401(k) accounts or IRAs.
“The impact to Americans’ retirement accounts may be bigger than 2008 and 2009,” said Dara Luber, senior manager of retirement at TD Ameritrade. “But withdrawing from your retirement savings should be a last resort.”
TD Ameritrade (AMTD) is in the process of being bought by rival Charles Schwab (SCHW). The Department of Justice ended its antitrust review of the $26 billion merger earlier this month. Shareholders have also voted in favor of the deal, which is expected to close in the second half of this year.
The survey of more than 1,000 adults over the age of 24 with at least $10,000 in investment assets was conducted online by The Harris Poll on behalf of TD Ameritrade from April 24 through May 4 – before recent market gains pushed the Nasdaq to a record high and the S&P 500 back into positive territory for 2020.
Memories of the last big crash still linger
But the market rebound hasn’t been enough to ease the financial pain that many investors are still feeling as a result of the 2008 financial crisis.
Luber said many investors are still trying to rebuild their savings from the hit they took during the Great Recession. But she’s encouraged by the fact that people are looking for ways to invest more for shorter-term goals – especially in times of crisis.
“People are thinking more about their finances. Those who can are building up emergency savings,” Luber told CNN Business.
Still, Luber said that that investors need to be aware of some recent changes enacted by Congress to encourage them to save more.
TD Ameritrade found that 32% of the survey’s participants mistakenly thought they had to pay back money they received from government stimulus checks. That means that people might be less willing to invest that cash for retirement.
But another recent survey of investors from 401(k) provider Vanguard found that people are taking the market swings in stride. Just 5.3% of investors taking part in defined contribution plans were actively trading between January and April.
“Participants remained unflappable and focused throughout the recent market volatility,” said Martha King, managing director and head of Vanguard Institutional Investor Group, in the report.
