In a new report, “Financial Wellness and Retirement Readiness Among Healthcare Sector Employees: Impact of COVID-19,” TIAA found that COVID-19 has negatively impacted health care workers’ retirement savings and outlooks. Twenty-three percent have decreased the amount they are saving, and, among this group, 7% have stopped saving altogether. However, 14% have increased their savings.
Overall, 38% are less confident they will have enough money to live comfortably throughout retirement, and 29% are less confident they are saving an adequate amount for retirement. Among those who decreased their retirement savings, 47% say they are less confident in their future retirement.
Nearly 30% of retirement savers have changed their investment allocation, with 19% decreasing their equity exposure and 9% increasing it. Twenty-six percent have become less confident they are investing their retirement savings appropriately. Among the percentage of respondents who decreased their exposure to stocks, 46% say they are feeling less confident.
A third of health care workers have changed their expected retirement date, with most of them delaying it.
Among those 50 and older, 29% are pushing back their retirement age, with 45% expecting to work past age 67. However, 43% say they would like to retire earlier.
Twenty-nine percent of health care workers who are saving for retirement have given little, if any, thought to how to manage their savings in retirement and draw income from it. Only 14% are very confident they will choose the best way to do so.
Only 22% think they will annuitize some of their retirement savings, but 54% are not sure.
Twenty-five percent of health care workers are not confident their savings will cover health care costs in retirement, and 62% are not confident about paying for long-term care, if needed.
In terms of their overall financial situation, 46% say that it has worsened, and 27% expect it will get even worse.
Three-quarters of respondents had emergency savings prior to COVID-19, and 33% have tapped into it.
Eighty-four percent carry debt, and, of this group, 45% say it is putting constraints on their finances. Twelve percent say they have missed or made late loan payments because of COVID-19 causing them financial hardship.
“Achieving or maintaining financial wellness has proven challenging for many since the onset of COVID-19 and the economic consequences that followed,” TIAA says in its report. “Many workers have experienced layoffs, furloughs and decreased earnings, and financial market volatility has affected savers to various degrees.”
More than half of retirement savers in the health care industry have received retirement planning advice from a professional within the past two years, and, of this group, 20% have received such advice since the onset of COVID-19. Twelve percent report that they are very interested in receiving financial advice, and 43% are somewhat interested. The health care workers who were surveyed said they would like to discuss creating retirement income, and health care and long-term care expenses in retirement.