Small-business workers continue saving despite coronavirus financial chaos, study shows
Most workers made no adjustments to their retirement plan contributions
Small-business employees appear to have largely managed to keep their retirement planning on track, despite the severe economic consequences of the coronavirus pandemic.
A new study conducted by small-business retirement firm Ascensus showed that 93.1 percent of employees at small businesses made no change to their workplace savings rates despite the financial upset.
Between January and June, nearly 2% reduced their savings rate, while 3.7% actually increased their contributions.
HOW HARD HAS CORONAVIRUS HURT SMALL BUSINESSES IN YOUR CITY?
Additionally, while some employers had stopped matching contributions to retirement accounts during the onset of the pandemic, researchers found “encouraging signs” that most had begun submitting contributions again as of June.
The biggest signs of improvement were seen among the smallest businesses and within industries that were hit hard during the pandemic – including retail and accommodation.
As of June, there was a 7.4% decline in total employer contributions since March – a 4% month-over-month improvement.
AS CORONAVIRUS ACCOMMODATIONS END, GOVERNMENT URGES BANKS TO HELP BORROWERS
The pandemic’s negative effects on the U.S. economy has caused increased uncertainty among workers’ retirement plans – including not just their own accounts, but also what could happen to funding for programs like Social Security.
That may help explain why some people are placing a larger emphasis on saving. According to recent data from the U.S. Commerce Department, the savings rate in June was about 19%, which represents the portion of disposable income the average person saved. In May, the savings rate exceeded 24%.
In the second quarter overall, the personal savings rate was about 25%.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
It is worth noting, however, that throughout the pandemic millions of Americans lost their jobs and may therefore no longer be able to contribute to a 401(k) or other retirement account.