Despite some good signs over the last year, experts warn the pandemic still could have negative repercussions on workers’ retirement savings.
Although COVID-19 has dealt a blow to many employees’ retirement behavior and optimism, there’s at least one bright spot: The pandemic has caused some participants to pay more attention to their retirement accounts and savings progress.
Although 60% of respondents in a new survey from provider Vestwell said their behavior regarding their 401(k) stayed the same over the last year, about one-quarter said they checked their account more often, 10% increased their contributions and 6% made investment changes. The provider surveyed more than 1,000 participants.
“Employees showed a heightened awareness around their retirement plan balances in 2020,” says Ben Thomason, Vestwell’s executive vice president. “Fortunately, not many acted on their instincts to withdraw funds or implement near-term changes.”
Retirement has become a sensitive topic in the midst of COVID-19. Not only did some 401(k) balances drop significantly due to market volatility, but a handful of employers have halted or reduced retirement matches or are considering doing so. But Vestwell’s report is the latest indicator that employee interactions with their retirement plans have remained relatively stable despite financial hardships.