Saving for retirement is challenging enough as it is, but the coronavirus pandemic is making it even harder for many Americans. The stock market took a nosedive during the first quarter of 2020, and tens of millions of people are out of work due to COVID-19 -- making it difficult to pay the bills, let alone prepare for retirement.

Whether you have decades to save or retirement is just around the corner, the coronavirus crisis could affect your senior years in these three ways.

Bear wearing a mask with stock market in the background

Image source: Getty Images

1. It could affect how much you're able to save

Your retirement fund may have taken a hit recently when the stock market took a turn for the worse, but historically, the market has always bounced back eventually. So if you're planning on working for at least a few more years, you should see your savings recover with plenty of time before you retire.

However, if money is tight right now and you're withdrawing money from your retirement account, that could have a lifelong effect on your savings. Your investments depend on compound interest to help them grow exponentially the more time they have to sit in your retirement fund. That means the longer you leave your money alone in your retirement account, the more you'll be able to save by the time you retire.

Every time you withdraw from your retirement account, you're making it harder for your money to grow. Especially if you withdraw a large amount or take repeated retirement fund distributions, you'll need to supercharge your savings later if you want to reach your savings goals on time.

2. Social Security benefits could face cuts

Social Security has been in financial trouble for a while, but COVID-19 could exacerbate the problem and cause benefits to be cut relatively soon.

The Social Security Administration (SSA) depends on payroll taxes to fund benefits; the money that comes in from payroll taxes now gets paid out to current Social Security beneficiaries. However, there's so much money being paid out in benefits that payroll taxes aren't enough to cover it. To avoid making cuts, the SSA has been dipping into its trust funds to cover the deficit.

Those trust funds are running out of money, though, and the SSA estimates they'll be depleted by 2034. When that happens, payroll taxes will only be enough to cover around 76% of benefits, meaning your monthly checks could be cut by nearly 25%.

However, the coronavirus pandemic could make matters worse. With tens of millions of Americans out of work, there's even less money coming in from payroll taxes right now. That means that in order to continue paying out benefits, the SSA will need to dip further into its trust funds -- which could deplete them even sooner. In fact, it's estimated that as a result of COVID-19, the SSA's trust funds could run dry as soon as 2028, according to a recent study from the Bipartisan Policy Center. So if you were expecting to depend on Social Security benefits in retirement, you may not be able to rely on those checks as much as you thought.

3. Unemployment could affect your savings and Social Security

Workers of all ages are facing staggering unemployment rates, but older Americans are especially vulnerable. Workers age 55 and older experienced an unemployment rate of 13.6% in April, according to the Bureau of Labor Statistics, which is one of the highest unemployment rates across all age groups.

If you lose your job later in life, it could take a while to find a new one. Some discouraged workers may simply decide to retire early if they can't find another position. If you choose to retire early or spend a significant amount of time unemployed, that will not only affect how much you're able to save (since you're probably not saving as much if you've lost your job), it can also affect how much you'll be eligible to collect in Social Security benefits.

Your Social Security benefits are based on the 35 highest-earning years of your career. Those earnings are averaged and then adjusted for inflation, and the result is your basic benefit amount. If you don't work a full 35 years, you'll have zeros added to your equation, which will bring down your earnings average and reduce your benefit amount.

The coronavirus pandemic has made life more challenging for millions of Americans, and it could also have an impact on your retirement. By being aware of these factors now, though, you can take steps to boost your savings and set yourself up for retirement success.