40% of Americans fear they won't be able to retire, survey says

Posted at 11:34 AM, May 20, 2020
and last updated 2020-05-20 18:29:43-04

VIRGINIA BEACH, Va. - The coronavirus pandemic has hit the county hard. In Virginia and North Carolina, people have been knocked down - physically and financially.

As states begin the slow process of reopening, many people are looking at their retirement savings. People who once felt confident and ready to retire are now second-guessing their so-called stockpile of cash.

"I talked to a man over the weekend who was having a panic attack on the phone. [He was] literally feeling like he was not able to navigate Social Security benefits; it was so confusing, but he didn't know how he was going to put the next meal on the table for his family," said Chief Operating Officer of SimplyWise Allie Fleder.

SimplyWise is a company that helps people plan for their retirement, helps them navigate financial decisions and understand government benefits that they're owed.

To get a better consensus of how people across the country are feeling, they surveyed 1,070 random Americans 18 years and older.

40% of people said they are concerned they won't be able to retire at all, and 56% are more concerned about retirement today compared to a year ago.

"Saving is difficult for Americans to begin with; saving during a crisis gets even harder," said Fleder.

The survey also found that 67% of working people plan to continue working in retirement.

Carl Carlson with Carlson Financial said the number one question you should be asking yourself right now is, "Do I need income from my investments to live a normal life and retirement?"

He said, "The 40% [of people who fear they can't retire, likely] are the people that need income. That's why they’re nervous because all of the sudden your investments drop by 30%, and that is going to impact your income."

The survey also found that one in five people expect to take money out of their 401(k) for immediate cash. The CARES Act raising how much you can take out and cutting the 10% penalty for those under 59 1/2.

"Now the problem is you're also taking money out when the stock in that IRA is down, so you need to be really careful," Carlson said. "Making a bad decision today could cost you 10% in your investments right up front."

Both experts said dipping into your savings should be a very last resort and you should avoid making any snap decisions based on fear or emotion. They recommend reevaluating your budget and looking at the "wants" vs. "needs" because that can make the cash you do have go further.

"If you're thinking about tapping any retirement account, Social Security benefits, credit card - think twice if you have the option. Taking out a personal loan, tapping your home equity - those can be better options for you today," Fleder said.

Click here for full coronavirus coverage.