Contributed by: Sandra Adams, CFP®
Going into 2020, none of us had any idea what we were in for. The coronavirus came upon us like an unanticipated hurricane. It is sticking around much longer than anticipated and is threatening to be around indefinitely. Many of us are on the verge of “pandemic fatigue”! While some have felt a short-term economic impact, any longer-term impacts will likely show themselves later.
For most clients nearing retirement, their goals are very much on track given the minimal impact of the virus on investment markets, employment, and savings SO FAR in 2020. However, the bigger concern for most clients looking at retirement is what their actual retired life may look like in the new world of COVID-19.
Many clients have been living in a world of quarantine. They are working remotely, socializing less, and communicating mostly via phone/video. The new world lacks the pleasures of travel, dining out, and group events. While this eases the budget, it’s not the life anyone desires to live every day in retirement. The retirement dream that clients work so hard to achieve is one in which they are traveling, visiting family, socializing with friends, volunteering, pursuing hobbies outside of the home, maybe taking classes, and/or pursuing a new job or career. Generally, none of these are activities that will be COVID-compliant, at least until the virus is under control or a vaccine is developed. For this reason, several clients have expressed the desire to delay their retirement date and continue working if we are still living in a COVID world. After all, “Why would I want to retire and sit at home in quarantine?”
As long as clients are working towards retirement, important financial goals should be:
Continue contributions to employer retirement plans
Build reserve savings to serve as a startup for future retirement cash flow
Carefully track budget cash flow to make sure you have a good sense of what you will need for retirement income
Reduce debt as much as possible before retirement
Its times like this that I’m reminded that for many, the non-financial side of the retirement decision is just as important as the financial side.
If you or someone you know is approaching retirement and would benefit from having a conversation with one of our financial planners, please let us know. We are always happy to help!
Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.