Retirement Plan Contributions Are Holding Steady Despite the Coronavirus Pandemic

Tens of millions of Americans have lost their jobs since the COVID-19 pandemic began, and many who remain employed are struggling with income insecurity. Toss in the fact that the stock market crashed in a massive way back in March, and it would be natural to expect that a whole lot of people would be pulling back on their retirement plan contributions and hoarding their cash in the bank.

But actually, recent data from Fidelity reveals that savers are not halting their retirement plan contributions. In fact, 88% of its plan participants put money into their 401(k)s during 2020's second quarter, which represents a tiny decline from the 89% of savers who put money into a 401(k) a quarter prior. Not only that, but 9% of savers actually increased their retirement contribution rates during Q2.

If your income has taken a hit in the course of the pandemic, then you may have no choice but to cut back on saving for retirement. And if you're out of work completely, you may need every dollar you can get your hands on to pay the bills while you attempt to ride out the recession. But if you're still gainfully employed, then it pays to keep steadily funding your IRA, 401(k), or both. Here's why.

Source Fool.com