27% of Americans Have Decreased or Stopped Retirement Plan Contributions Due to the Coronavirus

The coronavirus crisis has had a profound economic impact, and while some people have managed to coast through the past five months financially unscathed, others are truly struggling to make ends meet. It's not surprising, then, to learn that 27% of Americans have either stopped funding their retirement savings or have decreased their IRA or 401(k) contributions due to the pandemic, according to a new FinanceBuzz survey.

If you've lost your job or taken a hit to your income in the course of the ongoing crisis, then cutting back on retirement plan contributions (or pausing them completely) makes total sense. After all, your first priority should be putting food on the table and keeping up with your bills. But if you're still collecting the same paycheck that you were before the pandemic, then it really pays to keep funding your IRA or 401(k). Though you might think that skipping a few months' worth of contributions won't make a huge difference, in time it actually might.

Even if you're still working during the ongoing recession, you may be tempted to cut back on retirement plan contributions. But you may be surprised at how much that could hurt you down the line. When you stop funding your retirement plan, you don't just lose out on those few months of contributions; you also lose out on the sum those contributions could grow into.

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Source Fool.com