How to Adjust Your Retirement Savings in a Post-Pandemic World
Since the COVID pandemic, so much of our world has changed. From new health standards and the changes in K-12 education to grappling with inflation, there are plenty of challenges we all face in a post-pandemic world. Shipping times grew longer, investment landscapes completely changed, and so did the job market.
It seems there was nearly no industry on the planet that WASN’T impacted by the pandemic!
One universal truth is the guidance of an experienced financial professional is all the more crucial in today’s economy, in order to plan for your retirement. Let’s explore some of the ways your personal situation may have been altered by the global pandemic.
Evaluating the Pandemic's Impact on Your Retirement Portfolio
If you haven’t done so already, now is a good time to look at how the pandemic has affected your individual retirement portfolio. Retirement planning is certainly not something you want to “set it and forget it.” You can’t walk away for decades and simply hope it turns out all right.
Instead, retirement planning requires reviews and updates. With the pandemic, for example, changes in asset values or shifts in investment sectors could massively change the performance of your portfolio.
Now is the time, as the economy begins to recover and adjust, for you to do the same. Assess your long-term investments and note any impacts the pandemic may have made. Rates of return may have changed, which means expectations need to adjust alongside them. You may have to consider some new economic realities, and make choices accordingly, too.
Rebalancing Portfolios Amidst Market Volatility
Reevaluating your portfolio with a trusted financial advisor is the next best step to rebalance your retirement plans. Given market volatility, adjustments are often necessary.
My team and I are able to assist you in rebalancing your portfolio to account for a changing economy. The more volatility in the market means taking necessary precautions. If you are nearing retirement age, for example, you will want to reduce your risk tolerance.
Whatever the changes that occur in the market’s conditions, we can help you stick to long-term retirement goals. The right advice at the right time is what financial planning is all about, no matter what the market conditions look like.
Incorporating Flexibility into Retirement Planning
In addition to strategic timing, financial planning for retirement also requires flexibility. In the face of economic uncertainties, that flexibility is a must. You will need to adapt, be open to change, and have an open line of communication with your trusted advisor.
Building a resilient retirement plan means that it can adapt to even unexpected changes. That doesn’t just apply to retirement either. Your routine budgeting should also account for sudden changes. For example, every family should have an emergency fund!
Consider alternative retirement timelines, if necessary, making adjustments for a delayed retirement if you need to. We can’t control volatile markets, but we can be prepared with a “Plan B.” Likewise, establishing various income scenarios can be a smart move, for Plans C, D, and E, just in case. Like the Boy Scouts recommend, it is best to always “Be Prepared!”
Diversifying Retirement Savings for the Future
Another crucial step in retirement planning in a post-pandemic world is diversification. This is another key strategy for mitigating risks in today’s economy.
Diversifying investments is much like following the age-old advice: “Don’t put all of your eggs in one basket.” Some concepts you can include in your retirement planning for today’s markets can involve:
Varying stock/bond allocations
Exploring international markets
Reviewing commodities’ opportunities
Investing in real estate
Focusing on emerging technologies
The more that you are able to diversify your investing, the less impactful a down-trending market is likely to hurt your future retirement. Varying where and how you invest protects you from unexpected changes, like global pandemics, and can better prepare you for anything the industry may throw your way.
*Diversification does not guarantee a profit or protect against a loss. No person or system can predict the market. All investments are subject to risk, including the risk of principal loss.
Seeking Professional Advice for Retirement Adjustments
As always, my advice is to seek the help of a professional. When times are tough, it is the pros who know how to advise you best. The changes will come and go, and they may very well be unexpected, but financial professionals are typically able to recover and rebound in sensible ways.
An advisor can also provide personalized advice. While tips are helpful, each client has a unique need and set of circumstances. From where you stand in your savings, to how much you’re able to allocate, to the timing of your own retirement, there are a multitude of factors that can shift advice on finances. A personal financial advisor can direct you more precisely, understanding your unique goals, risk tolerance, and how to balance that with a changing economic landscape.
A post-pandemic world made us all rely heavily on one another. We had to trust each other to quarantine and follow healthy guidelines. We had to help one another recover. And now, though the pandemic may be over, we still will need professionals. Navigating the complexities of the market and making informed decisions for your personal retirement is one time you’ll want the sage advice of a pro!
Reach out and set up an appointment online here to start working together with our team or to check in on your current plan.
