Don’t Panic: Retirement Planning Amid (Coronavirus) Fears
The coronavirus outbreak has put a lot of folks in the position of financial anxiety. To gain some clarity on our current situation, we turned to Mary Beth Franklin, CFP.
Updated on Mar 24 2020
The coronavirus outbreak has put a lot of folks in the position of financial anxiety. To gain some clarity on our current situation, we turned to Mary Beth Franklin, CFP. On top of her credentials as a Certified Financial Planner, Mary Beth is also an experienced writer and editor within the financial industry, with expertise in Social Security claiming strategies, retirement, taxes, and income planning. She is currently a contributing editor for InvestmentNews. Read on to learn some of her top pieces of advice for Americans nearing retirement during the coronavirus outbreak:
These are unprecedented times, it is a crisis for both our economy and healthcare system. It’s a double whammy. Seniors are being especially affected as the most vulnerable in a market downturn. This has been the longest bull market in history. We expected a downturn in the market, but no one anticipated this.
Many people who have retired can’t go back to work. Looking at the economy, we’re already at an historically low unemployment rate. And, the shut down of the hospitality industry could cause the unemployment rate to skyrocket. In this climate, it is unlikely for older Americans to find jobs. If you are an older person with a job, you probably want to keep that job. The reality, unfortunately, is that it isn’t always our choice.
These are scary times, but we’re in this together and we’ll get through this together. Acts of kindness can go quite a long way in a situation like this, so give your neighbors a wave or a smile when you see them. And, remember to do what you can do to help the people in your community. Many people can get depressed, angry, and emotional during these times, so let’s try to strike the right note early on and go together from there. Keep in mind that conservative investments will not be affected as much. And, don’t feel the need to keep checking your portfolio balances, especially if it gives you anxiety. Don’t allow yourself to make reactionary decisions. If you do, you may miss those big bounces and a chance to recover. Also, I also wouldn’t be surprised to see some forgiveness on mortgage payments during this time. The government may offer a forbearance to help deal with our nation’s mounting debt.
Look at the long-term
Remember that your investments exist on paper, you haven’t really lost that money unless you sold out today. Retirement is designed for a long period of time. If you’re still working, it is advised that you have at least 3-4 months of emergency cash prepared, especially for necessities like housing, medical, and utility costs. As you near retirement, you’re more likely to have conservative investments. You still have time, so don’t touch those investments. In most cases, retirees are usually in a better position because most have a pension, Social Security, and/or Medicare benefits that are stable and will continue on into retirement. Hopefully you have the proper allocations in place at this point in your life. If you do, do nothing.
Beware of irreversible decisions
Fear is natural during times like these. But, you shouldn’t allow panic to dictate your decisions, as some of them can be irreversible. For example: Social Security. This is a scary time, and we shouldn’t make light of the situation. However, to people out there who haven’t claimed their Social Security benefit yet, don’t do it now simply out of fear. Unless you really need it, wait to claim until you’re at the point to receive the full benefit for the rest of your life. If you mistakenly take it out too early, you have up to twelve months to reverse this decision. However, it does require paying back what you received up to that point. Take time to think things through and consider what is going to benefit you in the long run.
Get some professional advice
Consult a financial advisor who can objectively look at your decisions, provide impartial listening, and give you some sound advice. Getting help from a financial advisor can help you from making irreversible financial mistakes. This can be helpful at nearly any time, but especially so when things feel so uncertain. Remember, there is always light at the end of the tunnel.
COVID-19 has created a wide range of financial issues for many Americans. Those in or nearing retirement can be some of those most seriously impacted. If you’re in this situation, try not to panic. Don’t make reactionary decisions, and keep the long-term in mind. And of equal importance, be kind to your neighbors during this situation. Everyone has been affected in one way or another, and the best way to move forward is to do so together.
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