Pandemic’s Impact Is Making It Harder for Many to Reach Financial Goals

More than 40% of non-retired adults said the pandemic’s economic impact will make it more challenging for them to achieve their long-term financial goals, according to a new Pew Research Center survey.

Among the 51% of the survey respondents who reported their financial situation got worse during the coronavirus crisis, 44% think it will take them three years or more to recover financially from where they were in 2020, and one in 10 said they don’t think their finances will fully recover.

What’s more, the Pew survey found that lower-income adults, as well as Hispanic and Asian Americans and adults younger than 30, are among the most likely to say they or someone in their household lost a job or took a pay cut since the outbreak began in February 2020. Among those who had these experiences, lower-income and Black adults were particularly likely to say they have taken on debt or put off paying their bills to cover lost wages or salary.

In another recently released survey from Clever Real Estate, 38% of the 1,000 consumers surveyed said they accumulated personal debts of $3,000 or more over the past year, while one in four homeowners or renters have missed at least one mortgage or rent payment over the last 12 months.

Even though their financial concerns are less pressing than earlier in the pandemic, many Americans have remained worried about meeting some basic needs, according to Pew, which surveyed more than 10,000 adults.

About three in 10 adults said they worry every day or almost every day about the amount of debt they have and their ability to save for retirement. More than a quarter of Americans said they frequently worry about paying their bills and the cost of health care for them and their family, and about one in five said they worry at least almost every day about paying their rent or mortgage or being able to buy enough food.

“These concerns are felt more acutely by lower-income adults, as well as by those in households that have experienced job loss or pay cuts during the pandemic,” Pew’s research noted. “Black and Hispanic adults are more likely than white adults to say they worry about each of these every day or almost every day.”

Among workers who lost wages during the pandemic, 49% said they are still earning less money than before the coronavirus outbreak began. The Pew survey found this is particularly the case among older workers.

Nearly 60% of employed adults ages 50 and older who experienced a pay cut since the pandemic outbreak began said they are earning less money than before, compared with 45% of those younger than 50. One in five in the younger group (versus 6% of those 50 and older) said they are now earning more than they did before the pandemic began, while about a third in each group said they are earning about the same as before.

Among Americans who were laid off or took a pay cut since the pandemic began, 27% of all adults 50 and older who are not retired said they are much more likely to expect their retirement to be affected. More than four in 10 said they either have already delayed or think they may have to delay their retirement because of the coronavirus outbreak, compared with just 16% who have not experienced a job loss or pay cut.

Predictably, adults with upper incomes have fared the coronavirus crisis better.

Almost four in 10 said their family’s financial situation has improved compared with a year ago, while 32% of those with middle incomes and 22% of lower-income adults said the same.

Upper-income adults are also more likely than those with middle or lower incomes to report that they have been spending less and saving more money since the coronavirus outbreak began. However, Pew’s survey found 86% of upper-income adults are spending less because the daily activities have changed from COVID-related restrictions than worries over their finances.

Overall, however, 53% of U.S. adults now rate their personal financial situation as excellent or good, up from 47% in April 2020, when the U.S. economy was in freefall.

More than eight in 10 upper-income adults and 58% of those with middle incomes said their finances are in excellent or good shape, as do about six in 10 or more adults with at least a four-year college degree, white and Asian adults, men, and adults ages 65 and older.

In contrast, about three-quarters of lower-income adults and the majorities of Black and Hispanic adults and those with a high school diploma or less education said their personal finances are in only fair or poor shape.