There are very few life events that have not been impacted by the effects of the COVID-19 pandemic on the world we live in. Just look at education, sports, entertainment or more memorable events like births, graduations, weddings, anniversaries, and funeral services. All have been disrupted in their own unique ways. Yet there is another life event, less discussed but equally influenced by economic ravages of the virus, and it is perhaps one we should give our heightened attention to. It is retirement.
If you were considering or entering retirement this year, then March 13, 2020 is likely to be a day you will long remember. That was the day the World Health Organization declared the novel coronavirus and global pandemic, and everything began to unravel. The S&P 500 Index started a slide that would top out at a loss of over 30%. As we became aware of the virus’s severity with cases and deaths mounting, governing bodies at the national, state, and local level enacted orders and restrictions creating a chain-effect that ultimately shut down the U.S. economy and forced more than 40 million Americans out of the workforce.
As difficult as the adjustments have been for each of us, however, if you are a recent or soon-to-be retiree, you were immediately confronted with life-altering questions to which there were no immediate answers. Yet, as we have slowly begun to open our economy and test the waters of reentry, it makes sense to address some of those retirement questions that may still be looming.
Recently, I had the pleasure of speaking with local TV station KMAX to address many of those very questions. This series of posts will capture some of the highlights of that discussion.
Q: IF SOMEONE WAS PLANNING TO RETIRE THIS YEAR, WHAT DO THEY NEED TO DO TO STAY ON TRACK?
That is a great and timely question. With the speed in which the market fell and has subsequently recovered, many investors are rightly nervous about market volatility and how their retirement savings could be affected. At times like this, I believe it is wise to reassess your current financial condition and that begins with an inventory:
1. Take Inventory of Your Savings
- When deciding to retire, one of the biggest factors to consider is if you have enough money saved to sustain your lifestyle in retirement.
- To figure this out, take inventory of your retirement accounts, including 401(k)s, IRAs, pensions, and annuities you may have.
- If your retirement savings took a hit and you do not believe you can afford to live off what you now have, you might need to delay your entry into retirement.
Events like what we’ve recently experienced are extremely rare and can have long-lasting consequences. To help gain a balanced perspective on the financial implications of such an event, I encourage you to work with a qualified financial professional who has experience in dealing with similar types of market and personal financial disruptions, and could help you develop a plan for your next steps toward retirement. Expertise matters at times like this.
2. Work with an Expert
- I recommend working with an expert. A financial professional can help you put a plan in place so you can prepare for and withstand difficult economic times.
- A comprehensive plan will help you feel more confident as it outlines your retirement goals and the path you need to take to achieve them.
- For many of my clients, their top concern is running out of money in retirement. We can map out a financial plan in real numbers and show them how each decision they are making now will affect them down the road.
In our next post, we will look at a few more of the most urgent questions on the minds of retirees or those considering entering retirement.