Nearly a third of employed Americans with at least modest investments say it's very or somewhat likely they will delay retirement because of the recent economic downturn triggered by the pandemic, an analysis has determined.
The latest edition of the Wells Fargo/Gallup Investor and Retirement Optimism Index reveals that 30 percent of the workers expect to postpone retirement because of the current financial picture. The finding is based on interviews with 1,076 U.S. adults who have at least $10,000 in an investment account or in their 401(k) retirement savings plan or an IRA.
The survey also found that nearly as many people — 29 percent — say it's likely they will work more than they intended in their retirement.
The effect on future expectations is strongest among workers in the 50-to-64 age group, of whom 40 percent expect to work more than they had planned in their retirement years as a result of the current downturn.
Tracie McMillion, head of global asset allocation strategy for Wells Fargo Investment Institute, said via email that an eventual market rebound may enable many workers to retire when they originally planned. “This may be especially true for those who have a financial plan that takes into account the ups and downs of financial markets,” she said.
The survey doesn't address whether workers who now intend to put off retirement will be able to work.
A 2019 Wells Fargo Retirement survey showed that 55 percent of workers surveyed retired earlier than they planned, most because of health conditions.
But economic damage from the pandemic could affect their prospects even more. Simply working longer to make up for losses in investments and household income “is not a realistic plan,” Teresa Ghilarducci, a professor of economics at the New School for Social Research and director of the Schwartz Center for Economic Policy Analysis, said via email. She noted that older Americans are now facing unemployment rates even higher than younger people.
"Older workers should have a financial plan that does not include working in retirement,” Ghilarducci said.