The pandemic has affected the way many Americans are able to save for retirement, with surprising disparities among age groups, gender and even geographic areas, new survey results show.
Nearly one in five Americans (17%) say they are saving less money for retirement due to the pandemic, according to the survey by The Penny Hoarder, a financial advice website. At the same time, however, the survey found that 16% of respondents are saving more money in response to COVID-19.
Geographic Differences
From a regional standpoint, people in the Northeast were much more likely to save extra money for retirement in response to the pandemic than respondents in other regions, according to the organization’s data. Among Americans who reported saving more, 44% live in the Northeast.
The numbers tell a different story in the South, however. Among those who are saving more due to the pandemic, just 14% live in the South, while 31% are saving less. The Midwest and West fared slightly better. According to the findings, 18% who saved more live in the Midwest, while 21% saved less. Similarly, 18% who saved more live in the West, while 11% saved less.
As one might expect, economic factors—including a state’s median wages, its unemployment rate and the overall cost of living—affect how much someone can save for retirement in one state versus another. And disruptions in the tourism industry may be causing a slower economic recovery in the South than other parts of the U.S., the organization suggests. For example, in Orlando, FL, where roughly one in five employees worked directly in hospitality and leisure in 2019, unemployment rates remained much higher than the national average in 2020.
Still, while the Northeast had a higher percentage of people saving more, the high-cost region also had a high percentage (35%) of people who are saving less due to the pandemic.
Gender Differences
The survey also found that men were more likely to ramp up their retirement savings in response to COVID-19 than women. According to the findings, 59% of men are saving more compared with just 41% of women. The organization emphasizes that pre-pandemic numbers already pointed to a sizable gender gap in retirement savings, citing a 2019 Bank of America Merrill Lynch Workplace Benefits Report, which found that women enter retirement with $70,000 less than men.
The pandemic also introduced new challenges for working-aged women, especially those with children. The cost of child care is a significant financial burden for many American families. Women were also more likely to work in sectors hardest hit by COVID-19 shutdowns, such as hospitality and retail.
Age Differences
Millennials were the age group most likely to save more for retirement in response to COVID. Here, The Penny Hoarder found that 35% of Americans who say they are saving more during COVID are Millennials ages 25-34.
Meanwhile, those with the least amount of time until retirement saw the biggest slide. Of the respondents who said they are saving less, nearly a quarter are GenXers between 45 and 54—meaning they may have missed some of the post-pandemic market gains. In contrast, just 19% of people in the 45-to-54 age group say they amped up their savings due to COVID.
The findings are based on a survey of 1,001 people conducted in October 2021 about the impact of COVID on retirement savings, with responses weighted so that each response is representative of the U.S. population.
