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Millennials raid retirement savings amid COVID-19, survey reveals

Yahoo Finance’s Sibile Marcellus joins Akiko Fujita to break down a recent Bankrate survey showing that millennials are most likely to raid their retirement savings during the COVID-19 pandemic.

Video Transcript

AKIKO FUJITA: Americans struggling to make ends meet are increasingly dipping into their savings. And that's especially true for millennials, at least according to a new survey out from Bank Right. Sibile Marcellus joins me here to talk about what exactly that survey reveals. I mean, certainly not surprising that a lot of people, especially those who are unemployed, are having to dip into their savings. But why are we seeing that generational divide?

SIBILE MARCELLUS: Right, so in terms of generational divide, we're seeing that millennials are the most likely out of all the age groups to tap their retirement savings in order to be able to have cash to spend right now to get through the coronavirus pandemic. So overall, more than a quarter of recently unemployed and even adults who are still working are pulling out their retirement savings in order to make ends meet right now. Among those who are unemployed, that number goes even higher. It's about half who are already doing so or planning to do so. Now, it's 20% of millennials who are doing it compared to 8% of Gen Xers and 10% of Baby Boomers.

Now, the top reasons for doing this include loss of income. That's the number one reason. But also wanting to take care of a relative, a family member financially, having debt, other expenses, and also needing more cash on hand. It's a very unpredictable environment right now. People just want to protect themselves. But in terms of this as a means of having more cash on hand, this is what many Americans are pursuing right now.

AKIKO FUJITA: Certainly a lot of people struggling on that front. Sibile Marcellus bringing us that latest survey from Bank Right.