Workers look to Social Security for retirement help as coronavirus sets back saving

Americans whose jobs have been hit by the pandemic have far less savings, survey shows

As the coronavirus pandemic sets some Americans back in their retirement planning, more people say they plan to rely on Social Security and Medicare to help fund their living expenses.

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About 81% of workers who have been negatively impacted by the coronavirus outbreak said the situation has reinforced how important the programs will be for their retirement, according to the 2020 Wells Fargo Retirement study conducted by The Harris Poll in August. Most people expect income from Social Security and Medicare to help cover 30% of their monthly budgetary costs.

Both programs are facing pending solvency crises, with reserves for Social Security expected to be depleted by 2035 – or even sooner. At that time, levies would be sufficient to cover 79% of scheduled benefits.

Nearly all workers said they would feel betrayed if the money they paid into Social Security is not available to them when they retire, the survey found.

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Retirement savings challenges – which were widespread before the pandemic – have been exacerbated by a deep recession that began in February and cost the U.S. economy about 22 million jobs – slightly more than half of which have been recovered.

Many workers who have had their employment situations affected by the virus outbreak have more serious doubts.

About 58% of people whose job was impacted said they don’t know if they have enough saved to retire, compared with 37% of all workers.

The study also showed a stark contrast in median savings between individuals whose employment has been disrupted compared to those who have not been negatively affected: Median savings for men in the latter category averaged out to $120,000, compared with $60,000 in the former group.

Median savings among women whose employment was not affected was $60,000, compared with $21,000 for those who experienced negative effects on their jobs.

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“Our study shows that even for the most disciplined savers, working Americans are not saving enough for retirement,” Nate Miles, head of Retirement for Wells Fargo Asset Management said in a statement.

On the bright side, most people surveyed were both able to pay their monthly expenses and confident in their ability to manage their finances. But a majority of people would also like lawmakers to help with retirement security.

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