Getting Your Retirement Back on Track During the Pandemic

There’s a good chance your retirement plan looks different today than it did at the beginning of the year, thanks to the pandemic. Take heart in knowing you’re not alone. Fifty-eight percent of Americans say their retirement plans have been negatively impacted by coronavirus, according to a recent Allianz Life study.

If you’re in this camp, the only way to get your retirement back on solid ground is to take stock of where you are—then reevaluate your investing plan and rebalance as necessary. The most important thing at this point isn’t where you’ve been, but where you’re going.

Take a Hard Look at Your Cash Flow

Over one-third of American households have lost income due to the pandemic. Families have been bridging the gap in a number of ways, turning to cash savings, credit cards, home equity loans and 401(k) loans. Think of right now as an opportunity to hit the reset button. This is especially important for people who’ve been collecting unemployment—the extra $600 monthly benefit that came in with the CARES Act is set to expire at the end of July.

Your wealth management team can help you assess your expenses, reexamine your income, and make a plan for moving forward in a way that replenishes your savings and prioritizes retirement contributions. The right financial advisor sees the big picture so you can tackle multiple goals at once, even if you’ve accumulated some high-interest debt during this time. Resetting your cash flow provides more flexibility to shore up your nest egg.

On top of this, the pandemic may very well have changed your long-term goals. Many are tweaking their vision to stay closer to home, focus on their emotional and physical health, and spend more time with family. Others are having to rethink their goals due to job loss or health concerns.

Changes like these can feel unsettling, especially since no one was expecting the havoc that COVID-19 brought about, but it’s possible to create a flexible retirement plan that allows you to adjust to life’s what-ifs.

Revisit Your Investment Plan

Remember: a smart investing plan is one that’s been built to absorb volatility and periodic market downturns. To cut and run now would mean missing out on future returns when the market eventually rebounds. On the other side of the coin, we understand that some investors may have to deprioritize their retirement contributions at this time due to job loss, income setbacks and medical emergencies.

Given all that’s happened economically, it’s a good time to connect with your financial advisor to see if rebalancing your portfolio is in order. If the pandemic created a temporary setback from which you’ve now recovered, they may also recommend increasing your retirement contributions to make up for lost time.

Just as we’re all reevaluating our long-term goals, you may want to reexamine your risk tolerance, as well. How much risk are you comfortable with? For some, adjusting a moderate allocation to be more conservative may make the most sense. Others may feel comfortable continuing on the way they have.

Either way, think about how any shift you make now could impact your expected returns over time. After accounting for inflation, will you still be able to reach your goals? If there’s a shortfall, you’ll want to plan accordingly so that you aren’t caught off-guard come retirement.

Another point worth mentioning is if your retirement timeline has changed at all. Your wealth management plan will be directly affected if you’re now expecting to either work longer or retire earlier. These are all necessary conversations to have with your financial advisor.

Review Your Estate Plan

The pandemic has become a global public health emergency that’s claimed hundreds of thousands of lives in the U.S. alone. It’s a frightening time that highlights just how important estate planning is. To that end, addressing these concerns now is one of the greatest gifts you can give your family. What you’re ultimately giving them is peace of mind and space to grieve after you’re gone—and you can rest easy now knowing that your legacy is protected.

If it’s been a while since you’ve looked at your estate plan, take some time to have a discussion with your financial advisor about your wishes and assets. They can walk you through updating key documents and making the proper arrangements for your estate. This includes adding and dropping beneficiaries, creating trusts, and arranging for financial and health care powers of attorney.

The most important message to take away from all of this is that you don’t want to wait until it’s too late to get your retirement plan together. The Opal Wealth Organizer is a great jumping-off point. From there, set up some time to meet with your financial advisor. We’re currently offering virtual appointments so you can discuss your retirement concerns from the comfort and safety of your own home.