Healthcare Workers Expect To Delay Retirement Due To COVID-19 Pandemic, TIAA Institute Study Reveals

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.

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TIAA Institute

Oct 21, 2020, 08:35 ET

NEW YORK, Oct. 21, 2020 /PRNewswire/ -- New TIAA Institute 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. To view the full report, please click HERE.

About the TIAA Institute

The TIAA Institute helps advance the ways individuals and institutions plan for financial security and organizational effectiveness. The institute conducts in-depth research, provides access to a network of thought leaders, and enables those it serves to anticipate trends, plan future strategies and maximize opportunities for success. For more information about the TIAA Institute, visit www.tiaainstitute.org and follow us on Twitter @TIAAInstitute.

About TIAA

With an award-winning^[1] track record for consistent investment performance, TIAA (TIAA.org) is the leading provider of financial services in the academic, research, medical, cultural and government fields. TIAA has $1.2 trillion in assets under management (as of 9/30/2020^[2]) and offers a wide range of financial solutions, including investing, banking, advice and education, and retirement services.

^{[1]The Refinitiv Lipper Fund Awards are based on the Lipper Leader for Consistent Return rating, which is a risk-adjusted performance measure calculated over 36, 60 and 120 months. Lipper Leaders fund ratings do not constitute and are not intended to constitute investment advice or an offer to sell or the solicitation of an offer to buy any security of any entity in any jurisdiction. For more information, see lipperfundawards.com. Lipper Fund Awards from Refinitiv, ©2020 Refinitiv. All rights reserved. Used under license. The Award is based on a review of risk-adjusted performance of 39 companies for 2016, 36 for 2017, 35 for 2018 & 2019, and 30 for 2020. The award pertains only to the TIAA-CREF mutual funds in the mixed-asset category. Without such waivers ratings could be lower. Past performance does not guarantee future results. For current performance, rankings and prospectuses, please visit TIAA.org.}

^{[2]Based on approximately $1.1 trillion of assets under management across Nuveen affiliates and TIAA investment management teams as of 9/30/20.}

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