As Covid-19 vaccinations rise and cases fall, a pandemic-free future may be within reach, but income brackets have a lot to do with how people are facing their financial futures, according to a survey.
More than half of 1,000 American adults surveyed in February by the Teachers Insurance and Annuity Association of America-College Retirement Equities Fund reported some change to their finances during the pandemic. TIAA-CREF provides financial services in the academic, research, medical, cultural and governmental fields.
Nearly a quarter of the respondents said they are now better off financially post-pandemic, while 29% said they are worse off.
Around 37% of the respondents making less than $50,000 a year say they were financially worse off because of the pandemic. The same was true for only 15% of the respondents earning more than $100,000.
There was also a demographic split, with older respondents reporting higher rates of difficulty.
In the 45-to-64 age bracket, nearly 40% said they were worse off compared to 27% of those aged 35 to 44 and 24% of those 18 to 34 years old.
Most of the respondents said they expect their fortunes to continue in the direction they’ve been heading.
Among those who said they’ve been left worse off due to the pandemic, 57% expect their finances to either stay the same or worsen in the next year. Among those who did better in the last year, 61% expect their finances to continue improving.
The income divide has also impacted respondents’ future plans.
Asked what activities they might partake in post-pandemic, 41% of those making less than $50,000 said they expect to take a vacation. That number rises to 62% for people earning more than $100,000. And 45% of the respondents earning above that level said they’ll take at least three vacations.
There was some common ground across income levels, however.
Whether they said they were worse or better off financially, many said they “have placed a greater importance on creating an emergency savings account going forward.” Many in both groups also said they want to save more for retirement, although the level is higher among those who said the pandemic improved their finances.
According to the survey findings, 73% of the respondents, “especially those who are worse off, say having guaranteed monthly income for the rest of their lives is significantly more important than having a particular dollar amount of retirement savings at the time of retirement.”
That’s a marked increase from a previous TIAA-CREF survey conducted in July 2020, when only 44% of those earning between $40,000 and $74,000 per year said that guaranteed lifetime income contributed the most to financial resiliency.
The desire to save more doesn’t necessarily mean that all respondents will be able to, however. For respondents earning less than $50,000, 44% said “it is unlikely they will be able to save more for retirement going forward,” and nearly 70% said they are unlikely to work with a professional advisor, “likely due to extra costs.”
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