Financial Fragility, Financial Resilience, and Pension Distributions

This article evaluates Americans' financial robustness during the Covid-19 pandemic, using measures of financial resilience and financial fragility derived from US surveys of persons age 45–75 from 2020 to 2022. The authors analyze which factors were associated with resilience and fragility, discuss how these measures changed during the pandemic, and assess whether pre-pandemic resilience led to better outcomes during the period. Results show that stronger resilience was protective in terms of financial fragility, and that financial literacy was associated with greater pension knowledge as well as better information about retirement plan distribution options. The more financially resilient were also more likely to select an annuity as a pension payout. The findings imply that policies and programs enhancing financial resilience could help households better withstand economic shocks and address income needs in times of crisis.