How COVID is impacting your retirement savings

Kia Young, America Saves Communications Manager at Consumer Federation of America joins Yahoo Finance’s On The Move panel to break down how the coronavirus crisis is impacting American’s retirement savings.

Video Transcript

- Shifting our attention to the way consumers save. Consumer Federation of America America Saves communications manager, Kia Young joins us now as part of our partner of the Funding Our Future campaign a group we feature each week only on Yahoo Finance. They advocate for a secure retirement for all Americans. Good to have you here, Kia.

KIA YOUNG: Thanks so much for having me.

- I want to jump in with something, because we all know it's important to save if you can save. But there's the issue if you're saving, that you may not be growing your money. And saving isn't enough. You have to grow that money. So what-- what advice do you have for people who are already struggling to save to then grow their savings?

KIA YOUNG: Yeah, that's one of the things that we've been looking at really deeply at America Saves, especially since the pandemic, the financial crisis has hit. We've really tried to make sure that we're hitting and reaching the people who are struggling the most-- those that already didn't have access to cash. And so we've really been thinking about how to get creative during this time. A lot of people talk about savings and they tell you, oh, you should cut back on things.

But really, what we want people to understand is sometimes, you have to consider that you might have to start thinking about adding an additional income in some, type, way, or fashion to what you're already doing. And so we've been encouraging our savers to really think about what are some fun ways, creative ways that you can add income to your family, so that you can continue to do those small things that right now, we really want to enjoy. like keeping your coffee or things like that. So there are ways to save your money and grow your money, but also, be creative and add income.

- Kia, of course, one of the extra sources of income that people been getting over the past several months are checks from the government. Those checks have now stopped, at least for now. How big of a problem is that going to be for savers? Because we haven't seen the savings rate go up significantly over the past several months with the addition of those checks.

KIA YOUNG: Yeah, I think that those stimulus checks definitely helped and helped us through a hard time. And now it's time for you to really think about what comes next. We can't really continue to depend on those things. So after you have looked at your budget, decided where you can make some adjustments, then you'll be able to sit down and really figure out what are those next steps that you can do for your family.

- Kia, you mentioned earlier the importance of trying to grow your savings with some creative ways. What are some of those ways? I guess it all depends on how much savings you actually have, but I'm sure there are some who are saying, well, I already have some reserves here. Is it worth investing it in the market to grow. Those who don't have as much, you know, what are the risks that they can take to grow a little more, given the reality of where we are today?

KIA YOUNG: Yeah, so we created a decision tree. We really created it back when the stimulus checks were coming out. But it really is kind of evergreen and you can continue to use it, where you can really make those decisions on what's the best step to take based on your unique situation. So if you have savings already, that decision tree will kind of guide you through, OK, what type of things should you be investing in right now, where can you save more, where can you invest, and where you can support other people in your community. So that decision tree that we created is a really helpful resource.

But as far as adding additional income, if that's-- after you've reviewed your budget, after you've looked at that decision tree, and kind of know what your next steps are, if you make the decision that oh, OK, it is time to add some extra income, some ways to do that right now we still have the gig economy. So if you are a relatively healthy person, think of things like Uber Eats or driving Lyft is an easy fast way. Instacart-- being an Instacart shopper. They have the touchless delivery. I've been using it myself quite a bit in our family.

So those type of things are a way to get quick cash injections to your family. But then you can also do things like freelance if you have writing skills or if you have really great admin skills, becoming a virtual assistant. A lot of people that have online businesses are really looking for support. A lot of organizations who've had to pivot and mostly work from home now need additional support, as well. So think about those talents that you already have that you might be able to turn into freelance opportunities.

And then there's some things around your home that you could probably just sell, right? So you could do a traditional yard sale, but you can also do things like Poshmark and thredUP and Facebook marketplace. A lot of people have been buying from right there in their community with the things that they need in their home. So there's a lot of different ways that you can add income right now.

- And we appreciate the advice. Kia Young is Consumer Federation of America America Saves communication manager. Good to have you.