Financial Advisor, WealthManagement.com, and Bloomberg Law recently covered Charles Schwab’s 401(k) Study with Logica Research. This study was conducted in order to show how respondents are dealing with 401(k) contributions and retirement plans amidst the COVID-19 pandemic.
COVID-19 Impact on Retirement Savings
As cited in the articles by Financial Advisor and WealthManagement.com, respondents believe that they need an average of $1.9 million in order to retire. This is a 12% increase reported from last year when the average was $1.7 million. The study also found that Millennials/Gen-Xers believed they needed $2 million, where baby boomers only needed $1.6 million.
Changing Retirement Plans
As noted in the Bloomberg Law article, 41% (2 out of 5) respondents said that they have changed their retirement plans in the past few months. This shows how workers are adjusting during this crisis, as 12% were found to have increased their payroll-deducted contributions since the pandemic began.
Focusing on Retirement Savings
Retirement savings has always been a top priority for those participating in a 401(k), and the Charles Schwab survey found that COVID-19 has increased this aspect financial planning even more. Of those surveyed, 37% felt they were "very likely" to achieve their retirement savings goals, 49% were "somewhat likely," and 14% were "not likely."
Background: Logica Research conducted a survey for Charles Schwab from May 28 through June 11, 2020. Those surveyed online were 1,000 Americans aged 25-70, and had to be working at companies with at least 25 employees and with 401(k) plan participants.