COVID-19 has complicated life for many, especially those planning to retire in 2021. With so much fluctuation in the market, it’s been challenging to establish financial goals or make plans to retire. But if you have a retirement plan in place, it’s not time to panic. Instead, carefully review your financial circumstances and revisit your investment strategies. Here are some tips to consider:
1. Revisit or realign your budget. You may find that some of your expenses have dropped in recent months, and you can now deposit more money to your retirement funds. On the other hand, you may be going through a difficult period due to sickness or income loss. In this case, your budget will guide you through these changes. And once your situation changes, you may find other opportunities where you can save money.
2. Maintain your automatic payments to your investments. If you are in the financial position to continue contributing to your 401(k) or IRA regularly, continue to do so. Maintaining your savings habit will also help you avoid unnecessary spending and keep your future intact. If possible, avoid withdrawing unnecessarily from your 401(k) or IRA, as doing so will result in penalties.
3. Continue to build an emergency fund. That way, you can keep up with any medical bills or more extensive repairs should you need to — whether you’re retired or not. Typically, you should save enough money to cover anywhere from three to six months of your expenses. And if you’ve had to dip into your emergency savings fund over the past several months, make a plan to rebuild your fund.
4. Consider delaying your retirement. Now may not be the best time to retire. Review your portfolio with your financial advisor. If your fund is not where you need it to be, don’t rush into retirement. You may want to work a few more years to give the market and your retirement portfolio time to stabilize.
5. Regularly review and maintain a retirement plan. If you don’t have a retirement plan in place, meet with one of our financial advisors to get started. If you do have one, it’s an excellent time to review your strategy and goals to make sure you’re still on the right path. Make any adjustments to your funds and discuss ways you can maximize your retirement plans.
As eager as you may be to retire in 2021, you may want to hold off. Postponing your retirement may allow you to pad your nest egg a little more and build your savings as well. But every person is different, so be sure to speak with your financial advisor before making any decisions about your future.
Learn more about the investment opportunities available at QCB. We’re ready to help you plan your financial future.