Getting back on retirement planning while the economy tries to prop back up from the effects of the health crisis might seem like an impossible task. It is possible that your main concern is to make sure that you are able to put food on the table and keep the roof over your head. You could be stretched out too thinly that your finances are barely making ends meet.
A lot of Americans went through a difficult time at the height of the health crisis. BLS reports about 9.7 million Americans unemployed as of March. Some are still trying to recover and looking for ways to stabilize their income. This is because, at the height of the pandemic, a lot of people were scrambling to get their hands on money that they do not have to pay for everyday living expenses.
As a result, many chose to dip into several funds meant for future use. This was the case especially for those who did not have an emergency fund to use. One of these funds could be your retirement account. Not only did you stop saving for it, but you could also have dipped into it to help you make ends meet. This is why you need to start getting back on retirement planning.
The sooner you plan for retirement, the earlier you can retire and enjoy life. If you took money out from your retirement accounts during the height of the health crisis, you need to find a way to put it back as soon as possible. It may not be easy but you have to start planning for the future. More than just saving money again, here are a few more things to look into.
Check on your investment portfolio
At this point, you have to make sure that you have a good understanding of where your retirement money is invested. The pandemic has challenged a lot of businesses and even big companies were not spared. If you have investments in the stock market, there is a good chance that the value of your shares went down. Once you see this, you could be tempted to sell what’s left just to salvage a small amount of your investment. You need to remember that you have to avoid knee-jerk reactions.
As the economy is slowly picking back up, you can see some of your investments recover and if you sold them at a loss, then that is a huge blow to your retirement plans. It will be a lot more challenging in getting back on retirement planning if you pulled out your investments at a loss. You lose principal amount and potential earnings.
As you check on your investment portfolio, try not to make any rash decisions. The value of stocks does go up and down and you need to time it in a way where you come out on top. If you are feeling a little worried, you can make adjustments to your investments to help you be more comfortable. Make calculated moves so you are more comfortable with your investments but do not rush into decisions that you might regret later on.
Monitor your 401k
Your 401k will play a crucial part in your plans of getting back on retirement planning. To start with, you need to constantly monitor this account. This is because hackers have been known to target these accounts simply because people do not check into them as often as they should. If hackers do get access to this account, it will be sometime before you can do anything about it. Marketwatch even shares that retirement accounts can be a hacker’s dream since they are not checked often.
Also, you want to make sure that if possible, you are able to max out your contributions especially if your employer offers a matching program. That is free money on the table you need to take advantage of. It will help you grow your retirement fund. But be aware of the vesting schedule in your company. You might decide to leave the company abruptly and you might not be able to get those matching amounts on your 401k.
Refine your retirement plans
In the process of getting back on retirement planning, you might need to make a couple of adjustments to your plans. This is mainly because the health crisis could have impacted your retirement plans and you need to make some changes. It does not mean that you have to abandon your plan. It only calls for some changes in your approach.
Just like if you have plans of retiring in the next couple of years. There is a good chance that you have to push it further especially if your income was impacted by the health crisis. Adjustments could include pushing your target retirement year further or saving more every month. This is because you could have paused on your savings or worse, you might have dipped into your savings.
If you have plans of buying into the small house movement, you need to take a second look at the housing market as well. The crisis could have changed some of the pricing and properties you looked at before could carry a different price tag. You need to take a look at home prices to help you adjust your plans accordingly.
Proactively pay down high-interest debt
Getting back on retirement planning will always include debt payment. It should be part of your plans to pay off most, if not all of them prior to retiring. At the very least, you need to focus on the high-interest accounts. These are the ones that put you at a financial disadvantage. Not only are you paying huge interest on the account but they carry also high fees and penalties in case you miss a payment due date.
More often than not, these are your credit card debts or payday loans. You might have used and even maxed out your cards during the crisis to pay for your needs. It is also possible that you were forced to take out payday loans so you can have access to much-needed cash. If this is the case, you need to make sure that you pay them down especially if you are retiring soon.
What you are trying to avoid is being in a situation where you are already in retirement but most of your monthly income only goes to high-interest debt payments. It prevents you to live the life you want and planned for in retirement. Rather than using the money for your hobbies, to travel, or even for books, you are left no choice but to pay your lenders.
Keep yourself healthy
Your health plays a big part in your plans of getting back on retirement planning. The healthier you are, the more you can prepare and plan for your retirement. You might even have the energy to take on side hustles to accelerate your plans or simply get back on track after the challenging health crisis. Add the fact that your health is one of the most important investments you will ever make in your life.
More than helping you enjoy your retirement, a healthier mind and body will also lower down your medical expenses as you get older. You do not have to set frequent consultations with your doctors and you lessen the need for maintenance medications. This is money you can use to prepare better and healthier meals to help you take on prevention than cure.
Getting back on retirement planning is not an easy task but not at all impossible even with the health crisis. You just need to have focus and make sure you create a concrete action plan to follow.