The COVID-19 pandemic has reshaped the ways in which many investors are spending and saving their money, but one priority that has not changed all that much: preparing for retirement.
Among those who had previously determined when they would retire, 69% of them said their goal has not changed despite the pandemic, according to new survey results from Ameriprise Financial. In fact, nearly one in five (18%) have accelerated their plans to retire, and of these respondents, 83% said the decision was voluntary. Only 13% of those who had a retirement date in mind said the pandemic delayed this target
Ameriprise’s Financial Priorities study surveyed more than 3,000 Americans with at least $100,000 in investable assets to understand what they care most about when it comes to their money and how their priorities have changed amid the challenges of the last year.
A majority of respondents (63%) said their household income was not impacted by the pandemic, and 10% said their income actually increased. However, 25% reported they are earning less money—demonstrating the uneven toll COVID-19 has had on Americans’ finances.
Against that backdrop, the firm notes that more than 6 in 10 respondents said protecting their financial assets (63%) and planning for uncertainty (62%) are more important to them now than before the pandemic. More than a quarter (26%) intend to increase the amount they invest for the long term in 2021.
Similarly, nearly half (45%) of respondents reduced their spending during the pandemic—and 30% of them expect to remain frugal in the future, the survey found. In contrast, a quarter of respondents said they made big-ticket purchases or incurred large expenses, including a home renovation. And once the pandemic ends, a quarter of investors anticipate spending more money than usual on activities they postponed.
The Full Picture
Not surprisingly, health and safety jumped to the top as a priority for investors. In fact, 71% of survey participants said keeping their family physically safe is more important to them now than before the pandemic—and it prompted many to think about the state of their financial affairs.
Moreover, 63% of investors who did not have an emergency savings fund prior to the pandemic put one in place or plan to do so soon. Similarly, 44% of respondents who did not have a will or estate plan previously have created one during the past 12 months or plan to do so soon.
Investors are also having more financial conversations with their relatives. Of the respondents who are parents, 30% said they are discussing finances more with their children. Likewise, a quarter of investors have increased discussions with their spouse or partner about long-term financial issues.
“The extraordinary circumstances of the last year convinced many people—even those who were already on strong financial footing—to take actions they may have previously put off,” says Marcy Keckler, Vice President of Financial Advice Strategy at Ameriprise. “Investors are paying closer attention to their finances and are making important changes to strengthen their financial situation.”
As investors look to shore up their finances, many place high value in the advice from a professional, the findings further show. Most respondents (83%) with a financial advisor said the pandemic confirmed the importance of working with one, while 39% of investors who do not have an advisor believe working with one could help them withstand unexpected changes. Among respondents who did not have an advisor prior to the pandemic, 30% have started working with one or intend to do so soon.
The survey was conducted online by Artemis Strategy Group from Jan. 6–21, 2021 among 3,028 Americans ages 30–70 with $100,000 or more in investable assets.