The top actions taken by Americans these past two years, according to Fidelity’s 2022 State of Retirement Planning Study (Graphic: Business Wire) The top actions taken by Americans these past two years, according to Fidelity’s 2022 State of Retirement Planning Study (Graphic: Business Wire)
Here’s where Next Gen investors stand amid the Great Resignation, according to Fidelity’s 2022 State of Retirement Planning Study (Graphic: Business Wire)
Retirement warning signs among Gen X, according to Fidelity’s 2022 State of Retirement Planning Study (Graphic: Business Wire)
Motivation vs. excitement among retirement savers when their goals are secured, according to Fidelity’s 2022 State of Retirement Planning Study (Graphic: Business Wire)
BOSTON–( BUSINESS WIRE )–With the two-year anniversary of the start of the pandemic now in the rear-view mirror, and the prospect of an endemic approach finally in sight, many Americans are looking forward to turning a new page, although concerned they’ve lost financial ground when it comes to the condition of their retirement plans. In fact, according to Fidelity Investments’ ® 2022 State of Retirement Planning Study , while 8 in 10 (79%) Americans express confidence they’ll be able to retire when and how they want, 1 in 4 also say they are now less confident than they were before the events of the past two years. Furthermore, 71% of Americans say they are very concerned about the impact of inflation on retirement preparedness, and almost one-third (31%) don’t know how to make sure their retirement savings keep up. “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” Tweet this “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,” said Rita Assaf, vice president of Retirement at Fidelity Investments. “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.”
Still, despite the general unrest in the world, people do seem to be growing somewhat more optimistic, especially among the young: 65% of respondents say 2022 is the year they put the pandemic behind them and focus on the future, a number that increases to 74% among the next generation of investors 1 . Almost 4 in 10 (38%) of next gen also say they are more confident than before the events of the past two years regarding their retirement prospects, which is more than twice the number of Gen Xers (17%). For those who report the pandemic has negatively impacted their retirement plans, 29% of next gen estimate it will take a year or less to recover—in contrast, only 18% of Gen Xers say the same.
Retirement Decisions: The Good, the Not-So-Good and the Downright Ugly
One thing that’s changed these past two years involves the evolving needs of retirement savers. People have learned important financial lessons during the isolation, and the focus of each generation has shifted over time. Next gen savers have the advantage of time on their side but need to ensure they are making smart retirement decisions. Meanwhile, older Millennials (aged 36-41) have moved into their peak earnings years, while the oldest of Gen Xers are now five years from retirement and most Boomers are making the transition into living in retirement.
How are people handling these priority shifts? First, the good news: the majority of Americans have put into place good financial behaviors and set practical post-pandemic priorities:
One increasing sign of the times is the emerging use of robo advisors to help with retirement decisions, particularly among younger investors. In fact, 61% of the next generation of investors say they like using a robo advisor to help navigate their next steps, compared to 35% of the general population.
In addition to these positive changes, though, there are several actions — or inactions — that have taken place, often by necessity, during the pandemic and the resulting Great Resignation, that may necessitate some course correction. Let’s break it down by generation.
Next Gen: Some Stood Still with Planning, or Worse, Cashed Out, During the Great Resignation
How to deal with a crisis? Hitting the pause button is one option, and 55% of next gen say they put their retirement planning on hold during the pandemic, which is much higher than the general population […]
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