There is nothing like the feeling that you are just about to retire in just a few months. For some, this is a culmination of all the hard work they have put in for so many years. They saved up to reach their goal and already thinking about what to do in retirement. It can mean endless sunsets at the beach, putting in a lot of time towards their hobby, or even enjoying the company of grandchildren more.
But will all these change because of the COVID19 health pandemic?
The health scare has already affected and swept through the nation with over thousands of cases and reported deaths in several states. Not only will it put our healthcare system to the test, but it will also show the dedication and commitment of our medical practitioners in the country. However, as you prepare for retirement in the very near future, what does this all mean for you?
The most serious question to ask is if you have to postpone your retirement because of the pandemic. Your firsts worry is if the economy will be stable enough to support and provide you what you need in retirement. At the end of the day, you will only be able to make the most of your golden years if you have the funds to spend on it. You are not about to retire if you still lack the money you will use and the current health scare can make you think twice.
With the Covid19 sweeping the nation and the world, is it a good time to retire or hold on to your current job until the situation goes back to normal. Here are a few things to consider and look into before you make that big life decision.
Assess your portfolio
If you are about to retire, you need to be constantly checking on your portfolio to make sure that you are on target. This should be the case even if the pandemic did not happen. Most retirees might forget to check on what their current portfolio is and find out too late that they were more on the riskier side in their investments.
Investments are quite tricky in the sense that you can choose to be safe but potentially earn only a small amount or do the opposite. You can take up riskier investments and have the chance to earn big on your returns. These are the two opposite sides of investments but there is plenty of middle ground to look into.
The idea is to understand your risk appetite but look into riskier investments in the beginning. As you grow older, you slowly shift into safer options to help protect not only your capital but your gains over the years as well. This is the main reason why you need to regularly check your portfolio to make sure that you are on track and able to manage your risk.
Make the necessary changes
If you are about to retire in the middle of the COVID19, there is a good chance that you need to make important changes in your retirement plans. For one, you need to decide on your investment portfolio. After making a review of your investment risk, where are you at present? Are your investments exposed in the industries seeing a rapid decline at the moment?
If it is, it would take some time for things to settle down so retirement might have to wait until then. If you are still in the clear but you foresee that your investments will start to take a hit in the coming days or weeks, you need to start moving things around. Remember that you spent a lot of time saving for what you have now and if you lose a significant portion of your retirement money, you do not have enough time to recover.
This is the same reason why you need to regularly check and make necessary changes to help you protect what you have already saved. The older you get, the less time you have in the workforce to recoup back losses from bad and uninformed investing decisions. You cannot just take on a risky investment thinking it can fetch you a tidy sum for retirement. Forbes reminds people also to take on risk investment that they are comfortable with.
Avoid knee-jerk reactions
You need to understand that if you are about to retire in the midst of the Covid19 pandemic, you still need to weigh your decisions very carefully. As you have to make adjustments, it does not mean that you have to react to every single problem immediately. A knee jerk reaction now could also cost you your retirement money.
You might start to think that that you have to unload and start selling investments that might get affected only to find out that they actually increased in value. You lose a lot of potential growth in the process which you need to help you retire on time. It is important to identify the areas you need to work on but it is crucial also to carefully weigh your decisions before acting on it.
The important thing to remember when making retirement decisions is that you need to take into account your age. If you are nearing retirement, there is a good chance that you are in your 60s as Gallup shares that the average retirement age for Americans is 66 years of age. At this age, it would be more difficult to recoup back losses because you did not think things through and made an uninformed decision.
Look for ways to augment your income in retirement
If you are about to retire, it can help your finances if you can identify a way to earn extra money once your regular paycheck stops coming in. This is true especially in the middle of the COVID19 pandemic. If you already have a plan what your side gig will be in retirement, assess the viability of your option in light of the global health scare.
A lot of industries at the moment are feeling the pinch of COVID19 in terms of income and business viability. It is indeed a litmus test for most to see how well they will fare given these extreme economic situations. Not all of them are set up in a way where they could still thrive in the face of a recession. You might need to make some changes to your approach.
If you are a photographer and will rely on events to earn extra money, that industry will be down for the next few months. Social distancing prevents big events to help reduce the spread of the virus. If this is the case, consider taking photos for the purpose of selling them online as stock photos. A lot of companies will continue to put content out there and would need photos to go with their content. You do not have to change everything but it would help if you can tweak your approach.
It is really a challenging time if you are about to retire in the middle of the COVID 19 pandemic and you need to think about it thoroughly. There are a lot of factors to consider but you should not be afraid. Much like most problems the country has faced in the past, there is life after this pandemic and you need to set your sights towards that.