Millennials Hit Hardest During the Pandemic

Many have dipped into their retirement savings, and some have even stopped or cut back on their contributions.

Of all of the generations, Millennials have been hit the hardest during the coronavirus pandemic, with nearly half (48%) saying they have had to dip into their retirement savings, according to a survey by Allianz Life Insurance Co. of North America, the “Q4 Quarterly Market Perceptions Study.” This compares with 32% of Generation Xers and 22% of Baby Boomers. Further, half of Millennials have either stopped or reduced their retirement savings—compared with 41% of Gen Xers and 36% of Boomers.

Among all age groups, 34% have dipped into their retirement savings due to the economic impacts of COVID-19.

Of all investors, 72% believe the markets will continue to be very volatile in 2021. Thirty-three percent say they do not feel financially prepared to ride out the economic impacts of COVID-19. And 44% feel the market hasn’t bottomed out yet.

As a result, only 25% of the people surveyed say they are ready to invest, down from 29% the previous quarter.

“We’ve watched as the pandemic continues to wreak havoc on peoples’ financial and retirement strategies, whether that is from unexpected job loss or early withdrawal of retirement assets,” says Aimee Johnson, vice president of advanced markets and solutions at Allianz Life. “It’s clear that people remain nervous about market risks and how their finances will continue to be impacted, not only in 2021 but for many years ahead.”

Fifty-three percent of those surveyed say the COVID-19 pandemic is having a negative impact on their retirement savings.

Nonetheless, 66% think the economy will improve in 2021, and 67% think their personal financial situation will ultimately improve.

Sixty-seven percent say the impact of the pandemic on the economy has prompted them to rethink how to protect their retirement savings, and 56% say they will adjust their retirement strategy if the volatility continues in the next year.

“We shouldn’t forget some of the things we can take away from this unprecedented year, including how to prepare for and manage risks within a retirement strategy,” Johnson adds. “Taking steps to help mitigate these risks now can make a big difference in both the long-term and short-term as we wait to see what 2021 has in store for us.”

Allianz conducted the online survey of 1,003 participants this month.