The COVID-19 outbreak has some Americans rethinking their financial plans for retirement and what they can sock away for the financial future of their children. While a majority of Americans tighten their belts to account for current economic conditions, many are seeing the costs of essential items going up, amounting to increased monthly spending, though most are skewing towards a philosophy of “saving” over spending.
- Nearly half of “savers” and “spenders” alike say they are now more of a saver because of the coronavirus (COVID-19) outbreak (46% among savers and 47% among spenders).
- Fully six in 10 Americans today consider themselves to be more “savers” than “spenders”. This is up six points from this time last year.
- For half (49%), monthly spending has decreased. Compared to this time last year when just one-third said their spending had decreased (+16 pts).
While over two-thirds (67%) of Americans have not changed their plans for retirement in the wake of COVID-19, nearly two in 10 (19%) are not sure how the pandemic will impact their retirement.
- Greater shares of those with part-time work (23%) and unemployed people looking for work (32%) are more unsure.
- Among those who are unemployed and looking for paid work, 15% are actively making plans to delay retirement because of the pandemic.
Just over one-third have a child or children under the age of 18 living at home and of these parents, 45% have set up at least one account to help secure the financial future of their kids.
- Among Americans who are contributing to savings for their children, nearly three in 10 (27%) are now contributing less to their child’s savings accounts due to COVID.
- As might be expected, those with more financial means are more likely to continue their pre-COVID contributions; Over three-fourths (77%) of highest income earners ($100k+) are still contributing the same amount to their kids’ savings, compared to just 36% of those in the lower income brackets (below $50k).