More than a third of Americans are more confident in their retirement plans now than they were before the COVID-19 pandemic, according to a new study from Fidelity Investments.

The study, which polled 1,204 adults who aren’t retired, shows that there is still plenty of optimism despite the financial challenges of the last year.

“The No. 1 reason we see for increased confidence is when people start to take planning seriously,” John Boroff, director of retirement and cash management at Fidelity, told RetireGuide.com. “People that have a well-thought-out plan have the most confidence, and they’re best positioned to deal with economic uncertainty or difficult times. So that’s the key. You can never discount the impact of the positive market performance. But as far as controllable factors, planning is the critical piece there.”

The study showed that in addition to 36 percent of Americans having more faith in their plans now, the vast majority are confident that they will achieve their retirement goals. This uptick in optimism may be due to an increased emphasis on planning as well as saving money.

“The study shows that 82 percent of people were impacted,” Boroff said. “Any time we’ve got something like that, whether it’s the economic crisis back in 2008 or something like the pandemic last year, whether you’re directly impacted or it’s just the threat of being impacted, is a time when people are going to start to focus on their finances, and I think that played a role.”

A Congressional Research Service report showed that the personal saving rate in the United States peaked at 33.7 percent in April 2020, well above pre-pandemic rates. While it has fallen since then, Americans continue to hold onto more of their money than they did before COVID-19.

Changes in Spending Habits Played a Role

It may have been easier for Americans to save in the last year as day-to-day spending habits have evolved with the pandemic.

The lack of typical entertainment activities and travel — as well as the growth of remote work — has given people fewer reasons to spend money.

“There were a lot of things that were so different about last year,” Boroff said. “Not only were we not travelling and spending as much on entertainment, a lot of people are working from home. So even work-related expenses, simple things like transportation costs to and from work, buying clothes that are required to be in an office environment.”

Working from home can be an especially impactful change for people nearing retirement. The lack of a commute and the expenses that come with it — along with the more relaxed environment of remote work — can make it an easier decision to keep working past your original planned retirement age.

“It takes some of the pain out of that work experience, and if you continue to work longer, if that’s an option for you or one that you would entertain, there are significant benefits there,” Boroff said. “You can first and foremost keep saving. You can stay on your employer’s health care insurance for longer so it reduces the cost of your health care in retirement.”

Americans extending their careers through remote work could also benefit by electing to take Social Security benefits closer to their full retirement age.

Millennials More Likely Than Baby Boomers to Have a Plan

Millennials may be decades away from retirement, but that hasn’t stopped them from planning ahead.

The Fidelity study noted that they are slightly more likely to have a retirement plan in place than older age groups such as baby boomers or Generation X.

But a recent Pew Research Center study found that Americans age 18-29 are the most likely to say that their financial situation is in fair or poor shape. The disconnect here may be a difference in what each generation considers a sound retirement plan.

“A plan means different things at different stages of life,” Boroff said. “When you look at someone who is 30-plus years away from retirement, a plan for them can mean that they’re saving, that they have a target savings amount and they have an understanding of the investment options that can help them achieve their goals. That’s all they need to have.”

Older Americans, however, have a lot more to consider when retirement is a reality in five — not 40 — years.

“You have to start to factor in a target retirement age, serious thinking about the kind of lifestyle you want to live in retirement, setting up your sources of income, the decision about when to take Social Security,” Boroff said. “There are a lot more things to think about so the plan becomes much more complex.”