A hot topic these days is how COVID-19 and the ensuing recession have affected retirement. The surprising answer may be “not very much,” according to a new issue brief published by the Center for Retirement Research at Boston College.
On the benefit side, Social Security payments continue to go out each month, and 401(k) balances appear relatively unaffected. On the income side, the impact on Social Security’s finances has been minimal, and employee and employer 401(k) contributions remain relatively steady, says the brief’s authors.
Despite the positive news, pre-COVID weaknesses remain. Social Security has a long-term deficit; 401(k) balances are inadequate; and older workers have trouble finding new jobs. In addition, the continued drop in real interest rates makes it harder to save, and the increased stress on states and localities makes it harder to fund their pensions. Read the full brief.