The COVID-19 pandemic has shaken healthcare workers’ confidence in their retirement savings; 38% report feeling less financially confident and 45% now expect to work past age 67.
New TIAA Institute (@TIAAInstitute) research reveals how the economic consequences of the COVID-19 pandemic have weakened healthcare workers’ retirement readiness and overall financial wellbeing.
According to the 2020 Healthcare Sector Financial Wellness Survey, 38 percent of respondents report feeling less confident that they will have enough money to live comfortably throughout their retirement, and 46 percent report that their overall financial condition has worsened. Further, the COVID-19 pandemic has increased the age at which healthcare workers now expect to retire; 45 percent of respondents expect to work past age 67.
“The impact of COVID-19 on healthcare institutions and their workforce has been extreme,” said Paul Yakoboski, TIAA Institute Senior Economist. “Some segments have experienced major increases in work hours, while others have experienced furloughs, layoffs and salary reductions. While much attention has been paid to the mental and emotional toll on our frontline medical workers, we must also pay attention to the financial toll on this obviously critical industry and its employees.”
Other key findings from the survey include:
- Twenty-seven percent of those whose financial condition has worsened expect further deterioration over the next year.
- Twenty-nine percent report feeling less confident that they are saving an adequate amount for retirement, and 26 percent say they are less confident that they are investing their retirement savings appropriately.
- Almost 30 percent of retirement savers have changed their retirement savings’ investment allocations—19 percent decreased the share in equities; only 9 percent increased it.
- Thirty-five percent of healthcare workers are not confident about having enough money to take care of medical expenses during retirement; 62 percent are not confident about paying for long-term care if needed.
- Three-quarters of respondents had emergency savings prior to COVID-19; one-third of these have used at least some of it.
The report also outlined healthcare workers financial priorities in retirement:
- Seventy-one percent rated “not outliving financial assets” as a high financial priority, sixty-three percent cited “ensuring the financial security of a surviving spouse,” sixty-two percent want to “maintain one’s standard of living,” and fifty-nine percent want “income that will not fall when financial markets decrease.”
“A low cost annuity would address healthcare workers’ top financial priorities for managing personal finances during retirement,” added Yakoboski. “Nonetheless, only 22% think they will annuitize any of their retirement savings; 54% are not sure. These findings reinforce the need for greater education around annuities and how they can be a cornerstone of a confident and secure retirement.”
The 2020 Healthcare Sector Financial Wellness Survey engaged 1,203 respondents in five occupation groups: registered nurses, physicians and surgeons, other medical professionals, office and administrative staff, and non-medical professionals. View the full report.
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