How Widespread Unemployment Might Affect Retirement Security

IB#20-11

The brief’s key findings are:

  • Before the virus, half of households were at risk of falling short in retirement.
  • The virus-related surge in unemployment has likely increased the share of households at risk from 50 percent to 55 percent.
  • And this increase does not capture the impact of lower asset prices and interest rates.
  • In addition, even the unemployed who were already at risk before the pandemic are in worse shape now as they face a larger savings gap.
  • The results stress one more reason to get people back to work quickly: the shorter the unemployment spell, the less harm to retirement prospects.