Two years after the onset of the pandemic, Americans are beginning to relax their COVID precautions, but many are worried about the financial ground they lost in terms of their retirement planning, according to Fidelity Investments’ 2022 state of retirement planning, released Thursday.
“With so much uncertainty in the world, people understandably have concerns on a variety of fronts, and ‘Are we there yet?’ has to be on the minds of many,” Rita Assaf, vice president of retirement at Fidelity Investments, said in a statement.
“The good news is, although the pandemic impacted us in many ways, from a financial perspective, our study shows having a plan in place is one solid way to help you weather any storm.”
Ipsos America conducted the online survey from Feb. 5 to Feb. 17 among 2,622 adult financial decision-makers.
Despite the general unrest in the world — not least the war in Ukraine — people do seem to be growing somewhat more optimistic, especially younger ones, according to the survey.
Sixty-five percent of respondents said 2022 is the year they will put the pandemic behind them and focus on the future, increasing to 74% among Generation Z and millennial investors.
One thing that changed over the past two years is the evolving needs of retirement savers. People have learned important financial lessons during the pandemic isolation, and the focus of each generation has shifted over time.
Younger savers have the advantage of time on their side, but need to ensure they are making smart retirement decisions, Fidelity said.
Meanwhile, older millennials have moved into their peak earnings year, while the oldest of Gen Xers are nearing retirement and most baby boomers are transitioning into retirement.
Dealing With New Priorities
How are people handling these priority shifts?
On the positive side, the majority of Americans have put into place good financial behaviors and set practical post-pandemic priorities. Fidelity pointed to the emerging use of robo-advisors to help with retirement decisions.
Sixty-one percent of younger investors said they like using a robo-advisor to help navigate their next steps, compared with 35% of the general population.
On the negative side, people have acted, or failed to act, in ways during the pandemic — often out of necessity — that may require some course correction. In fact, Fidelity describes some of their retirement planning decisions as “downright ugly.”
See the gallery for 11 not-so-positive stats on how participants’ retirement planning has shifted.