Coping with Coronavirus: Your Investments, Retirement Planning, and More
The world, and as far as financial realities go, the stock market, are disquieting places right now. So much is happening, and we all feel it. That’s why we put together a few suggestions for calming those anxieties we’re all having, and how today’s reality may impact the long term.
React, but don’t overreact.Things are moving and shaking a lot right now, that much is for sure. And while it’s important to be aware of those big shifts, there is an overwhelming amount of information being shoved in our direction all day, every day. In such an unpredictable time, It’s important to remain patient and parse through it mindfully.
As far as your investments go, it can be very scary to see such rapid declines, especially after such a long period of steady growth. The best thing to remember is this: your retirement accounts are for the long term. In the long run, every economic downturn has been followed by an upswing.
The worst thing to do is to take your money out when the market is down. Then, you’ve essentially locked in your losses. On the other hand, if you have the means, investing more when the market is down can actually make your money go further. Either way, always consult a professional financial planner about what’s best for you and your circumstances. And, regardless, we suggest checking to see exactly where your funds are invested right now to ensure you’re doing what’s best for you.
Don’t panic. Check-in.
Flexibility is key.You’re working from home (indefinitely), your schedule is totally different from last week. You’ve cancelled all plans for at least the next month or so, and remaining flexible has quickly become a necessity (to stay sane if nothing else!). The same goes for staying flexible as the market fluctuates.
If you had plans to retire in next few years, you’ll surely be extra-concerned about what’s happening with the market. Think of it this way: somebody else’s “long-term” is your “right now.” We are so early into these events that it’s uncertain how things will end up. But there are signs, such as Congress taking surprisingly quick action on economic stimulus measures, that are clearly meant to help lessen the blow on everyone, near-retirees included. Our suggestion again is to seek the advice of a professional financial planner, who can tell you about your many options for making your retirement work the best for you.
Keep cash on-hand.Hopefully, you already have some money put aside that could act as an emergency fund if the need really arises. But if not… well, there’s no time quite like the present!
Again, the Federal Government will hopefully provide help soon, but generally, you should do everything you can to have a stash of cash for as many months’ worth of bills as possible. You definitely don’t want to be pulling money out of your retirement accounts just yet (especially given the current financial climate).
But again, here comes another reminder not to panic. Keep that retirement account as stocked as possible. You’ll thank yourself later.
This isn’t the first time we’ve seen something like this happen…Other epidemics like ebola, SARS, and MERS have had significant negative effects on the market in the past. There is no question that this pandemic will be more impactful, both on our collective health and wealth.
But the upside to this all of that downturn could end up being similar to those previous ones: ultimately, the market turned around and retirement investment account began to grow again. And, more importantly, we were able to avert wider health impacts by working together. We’re keeping each other healthy and uninfected. The effects usually didn’t last past the 6-month mark, and everyone’s hard-won savings reaped the benefits.
So while it’s very difficult to get through the short-term without some worry about the future, the future itself is worth keeping in mind. Try to look to the long-term, not the short. And, as if we had to remind you again (are we just reminding ourselves now? Maybe…), don’t panic! We’re all in this together.
It’s all going to be a-ok.