How Widespread Unemployment Might Affect Retirement Security

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.