money CEO: 'The definition of retirement in America has changed'
The stereotypical retirement of morning golf rounds, fishing, and playing with the grandkids is long gone, according to one expert.
“We are hearing more and more that people are either considering to delay [retirement] or that the recent events have impacted their plans for retirement,” Charlie Nelson, CEO of retirement and employee benefits at Voya, said in a recent conversation with Yahoo Finance. “The definition of retirement in America has changed.”
Read more: Types of employer retirement plans
“It’s really thinking more about your stream of income for a number of your golden years,” he continued, “even though you may be part-time, you may be doing some other types of things.”
Nelson’s comments echo how many workers are rethinking their retirement plans. Half of Americans say they’re more open to looking for a job in retirement due to the COVID-19 pandemic.
‘People realize, OK this is kind of a bit of a new normal’
Americans are also reacting less rashly towards their investments, Nelson said. A recent Voya survey found that 88% of respondents believe that the best retirement strategy is to not panic during the pandemic.
“I think the message has gotten through,” Nelson said. “The path to retirement is a marathon. It’s not a sprint. And so sometimes people think very short-term.”
Even though Nelson’s firm received a multitude of calls from worried customers at the beginning of the pandemic, that died down as time wore on.
Read more: 401(k) Plans and how it works
“And [with] the volatility in the market, we did see a lot of activity, a lot of phone calls when the market was going up and down by 1,000 plus points,” Nelson said. “But then it's really settled down, back into...a more normal type of volume as people realize, OK, this is kind of a bit of a new normal. I got to stay with my plan.”
“There’s a number of things that people should [still] be aware of”
While Americans can withdraw up to $100,000 from their retirement accounts penalty-free due to recent changes in response to the pandemic under the CARES Act, it’s important to read the fine print.
"All of the provisions are not generally available to all employees and every 401(k),” he said. “Many of the provisions have to be adopted by the employer.”
Only employers who have authorized higher loan or withdrawal amounts can take them out. He also recommended assessing whether dipping into your retirement savings — either through a loan or withdrawal — is the best option for you.
Read more: Social Security, Medicare, and retirement benefits: How they work
“If you have that need, take a step back and say: ‘Is it really the right thing for me to take a loan or a distribution, or are there other sources of assets?’” Nelson said. “If I have a health care savings account, that may be a better way of spending or using your account to pay for health care expenses that you might have. There may be other sources of income.”
Dhara is a reporter Yahoo Money and Cashay. Follow her on Twitter at @Dsinghx.
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Half of Americans took from retirement savings or plan to amid pandemic, survey finds
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