COVID-19 and Americans’ Financial Security
The COVID-19 pandemic had financial implications for many families in the United States. Understanding the extent of these impacts and the most impacted populations were important for policymakers, researchers, and financial services providers during the height of the pandemic.
The COVID-19 Pandemic, Retirement Savings, and Financial Security study sought to better understand the financial impacts of the pandemic and what they meant for the financial security of American households. Four partner institutions—Morningstar, the Aspen Institute’s Financial Security Program, NORC at the University of Chicago, and the Defined Contribution Institutional Investment Association—surveyed a nationally representative sample of American households in December 2020 and mapped their outcomes to information gathered about them in 2019, before the pandemic began, creating a unique and valuable data set to study the financial impacts of the pandemic. This unique data set and resulting research provided critically important insight into the financial security of U.S. households.
Key Findings for this timely survey showed the following:
- Emergency savings were critical in mitigating the impacts of financial shocks associated with the pandemic.
- While most households did not access retirement savings to reduce financial shocks, there was an increase in the number of households that used these funds during the pandemic.
- Pandemic-related impacts exacerbated disparities among income and race and ethnicity groups.
- Lower-income households and households of color were more likely to report a greater decline in household financial security when compared to higher-income or white households.