Select Page

It is difficult to find a single area of life that hasn’t been impacted by the coronavirus pandemic. As everyone continues to navigate the “new normal” it is important to understand the importance of long-term financial goals and how the virus may impact retirement plans. 

First, it is imperative to have a solid understanding of sequence-of-returns risk. This risk is in regard to the chance that you may withdraw funds as your portfolio loses value simultaneously. Try and reduce your withdrawal rate as much as possible during uncertainty. If withdrawing is absolutely necessary during a downturn then you may want to focus the withdrawals on assets that aren’t as volatile and cash. 

Be strategic when rebalancing your portfolio. Always keep long-term financial goals in mind and make sure that investments are still meeting your goals

Another great reminder at a time like this is to ensure that your estate planning is organized. This means for both life and death. While the pandemic has created major amounts of uncertainty it’s important to make sure that your family and yourself are secure. After you are positive that all of your assets are protected, you will want to decide where all of those assets go. This can mean charities, family members, or foundations. 

Consider all of the giving options for your assets and if you have a nonprofit in mind make sure that you do your research and find an organization that is aligned with your values. Update all of your beneficiaries and organize all estate-planning documents. An estate-planning professional or lawyer can help you to discuss the strategy for gifting any assets. 

Furthermore, an important retirement planning tip is to make sure that you have an updated understanding of the IRS’ contribution limits as well as the new CARES Act. This will be the second year that the IRS has raised the limits for 401(k) contributions. Do a bit of research or ask your financial advisor for more information to find out if something like catch-up contributions is right for you. 

The CARES Act is waiving the required minimum distributions for the year 2020. The great news for individuals who are already retired is that they can now keep their investments in the market for longer amounts of time which may very well increase their value. Doing so can help retirees to avoid withdrawing funds when the market is low. 

Speak with a professional and make sure that your retirement strategy is adapting, keeping your portfolio intact to help you reach long-term success. Stay calm and take the time to prepare, review, and revise when necessary

Investing involves risk, including possible loss of principal. Insurance and annuity guarantees are backed by the financial strength and claims-paying of the issuing company. This information is provided for informational purposes only and does not constitute a recommendation or investment advice.