Some factors in saving for retirement are beyond employees' control

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Although cracks were forming in the foundation of retirement security for many Americans for years, the pandemic only made them worse. A broad body of research finds that most Americans are not on track for a secure retirement, according to a new report1 from the National Institute on Retirement Security.

The ongoing COVID-19 pandemic has presented extraordinary health and economic challenges across the globe, triggering yet another deep economic crisis. While the availability of several vaccines in late 2020 has begun to alleviate health and economic issues, the economic fallout from the pandemic may create substantial uncertainty about financing retirement that could trigger Americans to work longer or rethink retirement.

Even before the pandemic, many workers still were recovering financially from previous economic downturns. Simultaneously, the past several decades have seen dramatic changes to the U.S. retirement system.

Different generations, different challenges

The Silent Generation had broad access to defined benefit pension plans but faces growing health and long-term care expenses in retirement. Baby Boomers are transitioning into or approaching retirement, and a large share are expected to face financial hardship. Generation X was the first generation with 401(k)s as their primary retirement vehicle and also face high expenses as the "sandwich generation." And Millennials face a deeply troubling retirement outlook stemming from factors such as depressed wages, high college debt and the lack of participation in employer retirement plans.

According to the research:

Millennials and Generation X are most concerned about the impacts of COVID-19 on their retirement. Across generations, most of those who are concerned about the impacts of the pandemic plan to delay their retirement. Sixty-four percent of Millennials and 54% of Gen Xers are more concerned about retirement. As a result of the pandemic, one in five Millennials indicate that they have changed when they plan to retire.

There is generational agreement that the United States faces a retirement crisis, with Baby Boomers (72%) expressing the most concern. Millennials (72%) and Generation Xers (59%) are most pessimistic about their own retirement prospects.

Generations agree on Social Security, pensions, policy needs

There is broad support across generations for Social Security, including support for increasing contributions and expanding benefits. This support comes despite budget deficits, with the Silent Generation (92%) most supportive. Across the board, most Americans across generational lines see the value of increasing contributions to Social Security so it is in place for future generations.

All generations have favorable views of defined benefit pensions, with millennials holding the most favorable views. There is wide agreement generationally that pensions are better than 401(k) plans for providing retirement security and that everyone should have a pension. All generations agree that those with pensions are more likely to have a secure retirement.

There is strong agreement across generations that policymakers need to do more to improve Americans' retirement prospects. Three-fourths of all generations agree that Washington leaders need to give retirement a higher priority

"The United States is facing a retirement savings crisis that likely is worsening, thanks to yet another economic crisis," the report concluded.

"Except for wealthier Americans, the typical working American is not on track to maintain their standard of living in retirement. The retirement savings shortfall can be attributed to many factors, including the move away from pensions, stagnant wages and a lack of employer sponsored plans. Also, cuts to Social Security benefits and skyrocketing costs for health, long-term care and housing in retirement are exacerbating the retirement crisis.

This article was written by C.J. Marwitz from BenefitsPro and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to


Related Items

1. National Institute on Retirement Security

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