The COVID-19 pandemic is negatively impacting millions of Americans' financial situations, including saving for retirement, according to two surveys published Wednesday.
About half of the 1,902 U.S.-based retirement plan participants Edelman Financial Engines surveyed in August said they took actions detrimental to their long-term financial security due to the pandemic, a 50% increase from April. Nearly half of those actions (45%) directly harmed retirement accounts — like changing portfolio allocations, reducing savings rates and borrowing from their plan — while 30% increased outstanding debt and 21% reduced or depleted emergency savings, the survey found.
Nearly 1 in 3 workers (28%) said they previously accessed funds from their retirement plans and of those, 43% have done so multiple times, according to the survey. The pandemic is accelerating the trend, as 16% of workers said they're currently considering tapping into their accounts early, and 46% of those said the primary reason is related to the pandemic.
"It's troubling that so many Americans are turning to their retirement accounts for expenses unrelated to retirement, and that most are going to do it again," said Ric Edelman, the firm's founder, in a news release. "Their actions will harm their ability to achieve financial security in retirement."