Managing COVID-19’s impact on your money

August 9, 2021

Topics: Health Care | COVID | Job change

Media type: Article, Podcast

Managing COVID-19’s impact on your money

3.2 minute read • 

August 9, 2021

COVID-19 has changed every aspect of our lives, from how we shop to how we work. But how has it changed your financial life?

70% of Americans say their finances have been negatively affected by COVID-19. *We’re here to help you weather these economic shocks and get your retirement on the right track. Here are some of the ways your financial life has been affected and ideas on how to deal with them.

Imagine:

Your income is reduced or gone. Maybe your spouse or partner has been laid off or your hours have been reduced. Maybe you have to quit your job for health reasons. This is when cash, such as bank accounts, plays a key role in your financial planning, as you may need to dip into your emergency savings.

What to do next:

Start by asking a few key questions:

Can you earn income through casual work? How should you adjust your budget? Do you have enough savings to retire early? Our retirement income calculator can give you a clearer picture of your situation.

Imagine:

you need to retire early

Workers 55 and older have experienced the highest unemployment rate during the pandemic. ** Many people choose to retire after struggling to find a new job. If you are facing an unplanned retirement, there are steps you can take to ease the transition.

What to do next:

First, review your expenses. Is there anything that can be cut or reduced immediately? You can also create debt policies:

Some debtors are willing to negotiate payment plans, especially in times of economic uncertainty. Check out our guide to unexpected retirement.

Imagine:

you have to postpone retirement

On the other hand, some people have had to work longer than expected because their retirement savings have taken a hit. As you replenish your nest egg, try to cut through chatter about day-to-day market conditions. The good news is that more people are going out to spend, which helps improve the economy. *

What to do next:

Avoid big changes, like choosing investments that exceed your risk tolerance. If you need to adjust your financial strategy, try to make retirement your top priority. Above all, don’t be discouraged; delaying retirement might be the smartest decision you can make for your future.

Throughout history, investing has been subject to a law of gravity:

If it rises, it will fall, and if it falls, it will rise. ***

Jack Bogle, Founder of Vanguard

Imagine:

You don’t have a complete financial plan

Even if COVID-19 hasn’t affected your job or finances, you may still want to refine your future plans. Maybe you have savings, but want to organize your finances into clear goals. Getting more specific about your goals is a smart way to take control, even when your finances are secure.

What to do next:

Make sure your investment plan has clear and achievable goals. Having a clear vision of your future can help you make the best decisions for your investments. If you’re saving for more than one goal, consider opening a new type of account, such as a 529 savings plan.

Imagine:

you have not experienced any significant financial changes

If you’re not financially impacted by the pandemic, the above scenarios are still good reminders of the importance of emergency savings. Get in the habit of reviewing your plan regularly to make sure you’re on track to meet your goals. If you feel good about yourself, offer these thoughts to neighbors or family members who are worried about your financial future.

Although we don’t all face the same challenges, we all go through changes to some degree. The good news is that you can prepare for retirement or any financial goal, even with the economic shock of COVID-19. We are here to accompany you and guide you in order to transform your failures into successes.