COVID-19 Is Not a Retirement Story

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The brief’s key findings are:

  • Surprisingly, the COVID-induced recession appears to have had little impact on retirement because:
    • Social Security checks still go out and its finances are little changed;
    • 401(k) contributions and balances seem relatively unaffected; and
    • unemployment has not disproportionately hurt older workers.
  • But the pre-COVID weaknesses remain: Social Security has a long-term deficit; 401(k) balances are inadequate; and older workers have trouble finding new jobs.
  • In addition, the continued drop in real interest rates makes it harder to save, and the increased stress on states and localities makes it harder to fund their pensions.
  • Most important, the reason for COVID’s lack of impact on retirement is that the people who have the least have borne the brunt of the pandemic.