Retirement confidence and unemployment

As the COVID-19 situation continues to evolve and record numbers of Americans are unemployed, retirement confidence is unsteady — but we have resources to help.

Retirement confidence fluctuates

Consumers’ retirement confidence rose to pre-COVID levels in April, dropped drastically in early May, but then rebounded by the end of May. At the end of May, 28% of consumers surveyed felt very or extremely confident about three key aspects of retirement readiness: ability to accumulate enough money to retire, ability to convert savings into income that will last through retirement, and having enough money to maintain a desired lifestyle in retirement.1

Consumer Retirement Index

U.S. adults, ages 18-64, surveyed March 2020 - May 2020

The Consumer Retirement Index among Americans ages 18 – 64 began at 25% in March, dipped to 22% in April and ended at 28% in May.

Our Consumer Retirement Index (CRI) measures consumer confidence about retirement on a monthly basis. To better track the impact of the COVID-19 situation on retirement sentiment, we began measuring the CRI twice per month beginning in March 2020. The results reported here represent through May 2020.


Shift in consumer sentiment

A few factors may be at play: market performance, mixed feelings about the economy, and unemployment rates. In March and April, the overall trend in retirement sentiment closely tracked stock market performance. The stock market hit a low in mid-March and saw another dip in early April, but rose during the remainder of April and throughout May.2

As COVID-19 cases in the U.S. have been declining and businesses reopen, consumers are split about the future of the economy. In May, 44% of U.S. adults said they think the economy will get better in the next six months, and 38% think the economy will get worse.3

The role of unemployment

In early May — at the same time as we saw a significant dip in confidence — the Bureau of Labor statistics released unemployment numbers for April. They cited a loss of 20.5 million jobs in one month, with an unemployment rate of 14.7%.4 They also shared that April 2020 represents the largest one-month increase in unemployment since the BLS began tracking seasonally-adjusted data in 1948.5

Consumers learned that unemployment today is the worst it’s been since the Great Depression. Adding to concerns, Goldman Sachs predicted the unemployment rate will rise to 25% (Great Depression levels).6 Among all working age U.S. adults, 60% say they think it will be more difficult to find a job over the next six months.7

Over the next 6 months, do you think it will become easier or more difficult to find a job?

U.S. adults 18-64 surveyed between 5/1/2020 and 5/21/2020

21% of working age Americans think it will be easier to find a job over the next six months, and 18% think it will stay the same.

Margin +/-3%. 2,153 responses from May 1, 2020 to May 21, 2020. Percentages do not sum to 100% due to rounding. Generated by Civic Science® on May 21, 2020.


Retirement confidence across age groups

Throughout the evolving COVID-19 situation, we’ve seen retirement confidence vary widely across age groups.

Pre-retirees

The 55-64 age group saw the biggest drop in confidence, from a high of 33% in the beginning of March, to 27% in the second half of March, and remaining consistent in early April.8 In the second half of April, confidence rebounded as the stock market rallied.9 In May, confidence continued to drop steadily, ending at 24%.10

Mid-career

35-54 year-olds saw a smaller dip in confidence during March (23% in early March to 19% in the second half), but confidence shot up in April. In early May, confidence dropped to 17%, the lowest we’ve seen since the COVID-19 situation began. However in late May, confidence leapt to 27%.11

Early career

The 18-34 age group saw a 6-point drop between January and early March, perhaps coinciding with early signs of market volatility.12 Confidence among 18-34 year-olds remained consistent during April, rose slightly to 24% in early May, but confidence shot up in late May to 33%, the highest we’ve seen in 2020 for this age group.13

Retirement confidence by age group

U.S. adults surveyed March 2020 - May 2020

Confidence fluctuated among all age groups. Notably, U.S. adults ages 55-64 dropped steadily since April, whereas all other ages increased confidence in May.


Help participants take charge of change

You can help participants navigate this evolving situation and stay on track for the retirements they envision. Share these targeted resources to help employees face uncertain times with confidence:

1 Lincoln Financial & CivicScience Consumer Retirement Index. Data gathered by Civicscience: 3/1/2020 – 5/31/2020
2 NASDAQ 6-month performance retrieved 6/3/2020 from https://money.cnn.com/data/markets/nasdaq/
3 CivicScience: Data gathered 5/1/2020 – 5/31/2020
4 https://www.bls.gov/news.release/empsit.nr0.htm
5 Ibid.
6 https://www.forbes.com/sites/sarahhansen/2020/05/13/goldman-sachs-now-says-unemployment-will-peak-at-25-gdp-to-fall-39-in-the-second-quarter/#cb1c4712df93
7 CivicScience: Data gathered 5/1/2020 – 5/21/2020
8 Lincoln Financial & CivicScience Consumer Retirement Index. Data gathered by Civicscience: 9/1/2018 – 5/31/2019
9 Ibid; NASDAQ 6-month performance retrieved 5/21/2020 from https://money.cnn.com/data/markets/nasdaq/
10 Lincoln Financial & CivicScience Consumer Retirement Index. Data gathered by Civicscience: 9/1/2018 – 5/31/2019
11 Ibid.
12 Ibid; NASDAQ 6-month performance retrieved 5/21/2020 from https://money.cnn.com/data/markets/nasdaq/
13 Lincoln Financial & CivicScience Consumer Retirement Index. Data gathered by Civicscience: 9/1/2018 – 5/31/2019

Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals provided, and percentages may not precisely reflect the absolute figures.