7 practical ways to prepare for retirement in the Age of COVID-19


The first few months of COVID-19 has resulted in a volatile market that has left many biting their nails.

The uncertainty poses a challenge for new investors looking to save for their dream retirement in The Villages, Florida. The wrong move now can possibly thwart this dream, and cause investors to have less fulfilling retirements. However, we’ve compiled a list of seven practical ways to plan for retirement in an age of COVID-19 for those who already have investments.

Take the time to check your numbers

According to a study published by Northwestern Mutual’s 2020 Planning and Progress Study, a third of Americans reported being within three missed paychecks and close to the point of borrowing money or skipping bills. This report was released before the spike of unemployment due to coronavirus, and now for many Americans planning for their retirement, it is more important now to check your numbers.

Regardless of your current financial situation, sit down to review your finances. Review your expenses, look over your bank and credit card statements, and look for areas where you can save. Maybe this means spending less money on subscriptions you don’t use, or simply ordering take out. What matters is taking the time to know how you can save your money at this time.

Stacy Francis, a Certified Financial Planner and president of Firm Financial, stresses the significance of this, “Everyone should be doing this, particularly because of the crisis we’re going through right now, but for anyone who’s looking at early retirement, it’s imperative.”

Practice Patience

Across the country, financial advisors are telling Americans to practice patience.

Although the news surrounding the economy and coronavirus are nail biting, it i s best to resist the temptation of acting rashly.

This means, do not try to withdraw all of your money from the stock market or from your 401(k). It isn’t financially wise to take money from your retirement accounts or the stock market after these investments have lost much of their value. Instead, financial advisors recommend investors to ride out this low period, especially if you are far off from retirement. If you wait, these investments should regain their value.

Think of this as an opportunity

When stocks get affected by the market and drop, look at it as an opportunity as an investor. Right now is a good time to invest in more stocks for less dollars.

Financial advisors have noted that younger investors who are far from retirement should seize this opportunity to invest in the stock markets and maximize their 401(k) plans or IRAs. This is largely in part to how cheap stocks are today due to Coronavirus.

However, what if you’re close to retirement and want to pull money from your investments?

This is a difficult question, but if you have no other choice than to take money out from your investments, it is wise to leave some money and reallocate it to a mix of stocks. That way, when the market begins to improve, your return rate will be higher. Although, it is advised to only touch your investments if it is your only option.

Think of the long term

You may see your investments plummeting due to COVID-19. You may be tempted with pulling out from certain investments now, but financial advisors warn investors this isn’t the right decision. This goes back to patience. Be patient now, because re-allocating could hurt in the future. Don’t buy high and sell low. It is better to buy low and sell high. Even though things are difficult now, wait it out, and you’ll probably be better off.

Risk Tolerance is still important

Regardless of the stress surrounding the market with COVID-19, you should not change where your dollars are allocated. Remember, your long-term investing plan should not be altered because of a short-term economic disruption.

If you were content having a high-risk investment plan before the pandemic, you should stick with your current investment as it can still reap financial rewards in the future. Jumping to a more conservative plan may hinder the possible returns you could have achieved.

Look to diversify investments

Although not a new principle, the recent volatile market has brought an emphasis to the importance of diversifying investments. It is typically better to have a spread of investments across asset classes that fit your goals. It gives you a variety, and is helpful in times when changing strategies can result in losses.

Evaluate income generation choices

Once the market calms, and the pandemic has subsided, take the opportunity to sit down and look over your portfolio. Different future income levels may have changed, such as bond yields, and different equities may have been affected temporarily. These are good to review, and even possibly sit down with a financial advisor guidance.