This time last year, most people did not anticipate 2020 being what it has become, and they certainly did not expect things to be in such a chaotic state for almost the entire year. However, as people start to accept the new normal of things, the need to adapt and push though naturally follows.
The steps you take to plan for when to begin retirement have changed a bit now. Although the world is upside down right now, time continues to march on for all of us. Therefore it is important that those who are reaching the age of retirement should consider reconfiguring their retirement plan or create one all together.
The amount of adjusting one needs to take to correct their retirement plan depends on the different insurance policies and savings accounts one chooses to open or close. For instance, if you have health issues or waited until a certain age to apply for a traditional life insurance policy, you may not qualify and would have to look into instant final expense quotes.
An instant final expense quote is for a low-value coverage curated to cover funeral and burial expenses and other fees associated with an unexpected death. Your entire retirement plan would need to be reworked if you discovered you do not qualify for traditional life insurance, but with the right guidance, you can still complete it correctly.
Preserve Your Cash
When you are nearing retirement, you want to maximize every available dollar and not misuse any amount of money. Preserving your cash can take the form of you looking into herbs you can grow and eat at home or investing your money into inexpensive brands of food if you don’t want to do it yourself.
The recommended amount of cash to maintain for retirees is typically around five percent of their financial portfolio. However, some advisors recommend soon-to-be retirees to dedicate at least 20 percent to cash reserves.
The main thing to remember during this time is not to invest too much of your cash into stocks. Due to the pandemic, stocks have plummeted to low prices, making it appealing to invest a larger portion of your cash reserve into stocks.
Choosing to invest your cash into stocks is not a wise investment because when or how the stock market will repair itself is unknown. The main goal before retiring is to reduce your financial risks, and investing in stocks is just too risky.
Do Not Pull Your Investments
On the opposite side from being tempted to dump a ton of cash into cheap stocks, soon-to-be retirees should also avoid pulling their investments too fast. As stated above, when the pandemic hit hard, stocks dropped tremendously, so removing your funds may be your first reaction.
Ideally, you still have a few years before retirement, so leaving your cash in stocks gives it a chance to regain equity. Between February and March, equity indexes dropped 30 percent. This is shocking and unpleasant at first glance but based on historical data, equity investments generally recover after the stock market takes a big hit.
Look into Virtual Financial Planning
Many people are choosing to skip out on their annual investment appointments because of the pandemic, but most companies have transitioned to virtual platforms to continue to serve their clients. Being said, you absolutely should still meet with an accountant or financial planner whether in person or online.
Right now, they are the people who are best equipped to help you make the wisest financial decisions. Following expert tips to help you manage your business savings and expenses is just as important as well. If you plan to retire within the next couple of years, having your business finances squared away is necessary. Otherwise, it would not be much of a retirement.
Beyond making deposits through your mobile app, most financial consulting firms offer online financial planning services and consultations via phone or video conferencing. If you do not have a retirement or financial plan in place, contact one to help you, especially when you are trying to plan amid a pandemic.
Review and Tweak Your Estate Plan
By now, because of the coronavirus pandemic, most people are starting to realize they need more precautions in place when it comes to their financial and life insurance plans. So reviewing and revising your estate and retirement may be required. This process is probably best to do with an accountant, financial planner, estate planner, or a financial expert who is equipped to help you make the best decision.
Once you have ensured your assets are secured, and your plans are in order the way you want them, you should verify that those same assets will be distributed exactly where you want it in case you pass away. It could be to your family, friends, or even a charity of your choosing; the important thing is that the plan is set up how you want.
Estate planning is not just about getting your affairs for when you are here. It is also about preparing your assets and any other properties for whenever you die. This step is essential because you want to make sure your family and loved ones are taken care of after you are gone.
Preserve Your Retirement Plan and Stay Level Headed
It is wise to revise your retirement plan, but you should avoid tossing your entire retirement plan out the window during this time. Your life changes, so you may need to make adjustments, but if you end replanning your entire retirement plan just a couple of years before you retire, you will find the process to be both daunting and a lot of work.
During this pandemic, you are probably feeling powerless, like many others. The need to feel in control can lead to people frantically trying to adjust their retirement plan but those adjustments may not be ideal for a world post-pandemic. This is why it is essential to keep a level head when dealing with planning for the future.
Everyone is stressed right now, and some are, unfortunately, letting their emotions drive the decisions that are being made. To avoid doing this, stay calm, assess your savings and assets in moments you are most relaxed.
Instead of throwing your entire retirement plan out the window, spend time prioritizing your mental health by taking small steps in order to stay as secure as possible. Doing this will allow you to keep your emotions in check during this process.
Imani Francies writes and researches for the life insurance comparison site, EffortlessInsurance.com. She earned a Bachelor of Arts in Film and Media and specializes in various forms of media marketing.
