Financial Situation Changed Due to COVID? Professional Advice Can Help
The pandemic’s effects can be felt in many ways, some bad (you lost your job or were forced into retirement), some good (your savings grew fat while you were stuck at home). Maybe you put off marriage or buying a home. If you aren’t sure how to move forward, get help.
After almost two years, the pandemic has brought major life changes clouding the path to a stable retirement for many individuals. Americans are struggling with key decisions on investments and estate planning strategies, according to a recent Hearts & Wallets report, while the National Institute for Retirement Security says more than half of Millennials and Gen Xers are more worried about their retirement security than before COVID hit.
Add in significant changes in the employment market, with women being disproportionally affected than men and unprecedented numbers of workers taking part in the “great resignation” along with continued market volatility, and it’s no wonder retirement security feels unattainable for many.
But there is hope. Making some smart money moves right now can get you on solid footing for your retirement. Don’t know where to start? Professional advice — whether from a local financial professional or one offered through your workplace, a phone-based or virtual financial professional, or even digital advice tools — can help.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Where to start depends on your personal goals and how the pandemic may have impacted your progress. Here’s what to consider:
If you quit your job as part of the ‘Great Resignation’ …
… You’ll need to make sure the career change doesn’t derail your retirement plan. Think twice before cashing out of your previous workplace retirement plan, which can cost you big in taxes and penalties. Once you’ve landed in your next role, opt into the workplace retirement plan as soon as you’re eligible, contributing at least enough to get an employer match — more if you can. And carefully consider the options for your old 401(k) or similar savings plan.
If your new plan provides access to professional advice, take advantage of it. Or consider speaking to someone outside of the workplace who can provide you advice based on your entire situation.
If you put off milestones, such as buying a house or getting married during the pandemic …
… It’s time to get back on track, but be careful not to overspend to make up for lost time. A financial professional can help look at your current financial picture to create a financial strategy that will help you reach both your short- and long-term goals, or readjust them, as needed.
For newlywed (or soon-to-be-married) couples, a financial professional can serve as a third party to help you set financial goals and navigate the sometimes-tricky waters of combining — or not combining — your finances as you begin building a life together and planning for the future. Financial professionals can also help you make sure you’re adequately protecting yourself from a variety of risks.
If you want advice but aren’t ready for an in-person meeting …
...The virtual environment provides you with a wonderful opportunity to redefine how you would like to interact with your future financial professional. Many workers have come to appreciate the hybrid or completely remote work environment during the pandemic. Consider a professional advice model where you can engage by phone to talk about retirement planning or other financial challenges you’re facing.
If stimulus checks and a less active social life have boosted your savings account …
…You’ll want to make sure you’re reviewing and making progress on your financial goals. If you’ve paid down debt, built adequate emergency savings and are maxing out your retirement savings, you may want to look at your financial wish list — maybe starting a business, buying a second home or retiring early. Either way, you may also want to put your extra cash in savings into investments that match your goals.
Unsure what to do first? If all you need is investing guidance, digital tools can be a good place to start. We have a calculator and be sure to check out the suite of tools on this resource center page. A financial professional can help you prioritize and achieve your goals and, if appropriate, help you allocate your investments.
If COVID forced you into retirement …
… Professional advice can help you stretch your nest egg as far as possible. A financial professional can work with you to determine your best withdrawal strategy, after factoring in the size of your retirement savings, the types of accounts you have (taxable or non-taxable), Social Security and other income sources, and your expenses. They can also talk to you about whether it makes sense to consider working part time or using a guaranteed income product to ensure you never run out of money in retirement.
Remember, regardless of how you arrived at your current situation, taking the right steps now can help you feel confident that a financially secure retirement is in your future. Start today with getting the advice you need.
The Prudential Insurance Company of America, Newark, NJ.
1056430-00001-00
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Brad Hearn is the president of Retail Advice and Solutions, which brings together the extraordinary face-to-face advice expertise of Prudential Advisors with Prudential’s Hybrid Advisory team and digital advice capabilities – creating a single organization with end-to-end accountability for delivering holistic financial advice and solutions across the entire advice continuum.
-
5 Tips for Investing in the Trump Presidency
With Trump back in office, expectations are high the bull market will continue. Here's how investors can prepare.
By Karee Venema Published
-
Where to Retire: Living in Portugal as a US Retiree
Living in Portugal as a retirement landing spot has abundant advantages, but do your homework and due diligence first.
By Brian O'Connell Published
-
A Social Security Storm Is Gathering: Here's Your Safety Plan
If Social Security reserves are depleted by 2033, as predicted, future benefits could be cut by as much as 21%. Here’s how to weather the impending storm.
By Brian Gray Published
-
What a Second Trump Term Means for Investing in Water Safety
A new administration focused on deregulation could change the scope of today's water protections. So, what does that mean for the investors who support them?
By Peter J. Klein, CFA®, CAP®, CSRIC®, CRPS® Published
-
How to Avoid These 10 Retirement Planning Mistakes
Many retirement planning mistakes are easily avoidable. Here are 10 to have on your radar so you don't end up running out of money in your golden years.
By Romi Savova Published
-
Before the Next Time Markets Sink, Do Your Lifeboat Drills
An eventual market crash is inevitable. We can't predict when, but preparing for the ups and downs of investing is imperative. Here's what to do.
By Andrew Rosen, CFP®, CEP Published
-
This Late-in-Life Roth Conversion Opportunity Spares Your Heirs
Expensive medical care in the later stages of life is an unpleasant reality for many, but it can open a window for a Roth conversion that benefits your heirs.
By Evan T. Beach, CFP®, AWMA® Published
-
Women, What Is Your Net Worth?
Many women have no idea what their net worth is, or even how to calculate it. Many also turn to social media finfluencers for advice. Here's what to do instead.
By Neale Godfrey, Financial Literacy Expert Published
-
Converting Retirement Savings to a Roth IRA? Don't Do This
You might want to convert all of your savings to a Roth in one go, but you could end up paying hundreds of thousands more in taxes than you have to.
By Joe F. Schmitz Jr., CFP®, ChFC® Published
-
What Is Your 'Enough Is Enough' Number for Retirement?
Chasing a 'magic number' for retirement can be anxiety-inducing. Instead, build your plans around a personal number that reflects your individual circumstances.
By Scott M. Dougan, RFC, Investment Adviser Published