The Coronavirus pandemic spurred many retirees to shore up their finances by focusing on eliminating debt and/or building up funds that could be drawn on in an emergency without affecting their retirement savings, a survey has found.
The survey was conducted by the TransAmerica Center for Retirement Studies in mid-summer, after the initial impact of the pandemic had been felt through the economy and as some restrictions—some of which have since been reimposed—were being lifted.
Asked how the pandemic affected their financial priorities retirees most frequently cited “paying off some form of debt (45 percent), including paying off credit card debt, mortgage, other consumer debt, and/or student loans. One in three retirees cite “building emergency savings” as a current financial priority,” it said.
“Many retirees are still paying off household debt,” it added. It said that 46 percent have non-mortgage debt such as credit card debt, car loans, student loans, or medical debt—32 percent below $10,000 and 14 percent above. Also, 23 percent have mortgage debt, including equity loans or lines of credit—17 percent below $100,000 and six percent above.
Regarding accounts that they could draw on for emergency needs, it found that 62 percent have savings accounts, 47 percent could draw on equity in their primary residence, 35 percent have IRAs, and 18 percent have 401(k)-type plans like the federal Thrift Savings Plan, but 12 percent “have no savings and investments.”