The COVID-19 crisis has turned the world upside down, wreaking havoc on millions of Americans' health and finances. Tens of millions of workers have lost their jobs in the last several weeks, and the stock market experienced one of its worst first quarters in history.
With no end in sight to the coronavirus pandemic, it's uncertain when life will return to normal. Flexibility is key right now, especially if you're nearing retirement age. COVID-19 has likely affected your retirement savings, and it could potentially take years before your investments recover enough that you can afford to retire.
While nobody knows exactly how long this pandemic will last, many Americans have guesses on how long they think it will take before the economy bounces back.
When will the U.S. economy recover?
When it comes to how long it will take for the economy to recover from the COVID-19 pandemic, some Americans are more optimistic than others.
Approximately 44% of U.S. adults believe the economy will recover within one to two years, according to a recent survey from Country Financial. Roughly 11% of respondents believe it will take less than one year for the economy to bounce back, and another 11% estimate it will take five or more years.
The truth, though, is that the amount of time it will take for the economy to return to normal will largely depend on how long it takes to contain the virus. If the virus is contained quickly and social distancing restrictions are loosened, businesses might be able to recoup their losses, and the economy will likely bounce back relatively soon. But if the virus is not contained and the stay-at-home orders remain in place, it could take a lot longer for the economy to get back up to speed.
Although some states are taking steps to reopen businesses and jump-start the economy, the majority of Americans still support social distancing measures. In fact, 76% of Americans say people should continue to socially distance for as long as is needed to contain COVID-19, even if it means causing damage to the economy, according to a survey from Morning Consult and Politico.
Whether you're nearing retirement age or still have decades until you retire, a recession could throw off your plans. Fortunately, there are steps you can take to keep your future on track as the economy recovers.
How to prepare for retirement during a pandemic
It can be tough to plan for retirement when you're not sure what the future holds. But try your best to be flexible, and be willing to adjust your plans down the road.
If you're within a year or two of retiring, you might have to consider pushing your retirement date back if the economy doesn't recover relatively soon. Withdrawing your retirement savings during a recession can have long-term consequences, because you're selling your investments when stock prices are lower -- which essentially means you're locking in your losses. If you can delay retirement until the economy is in better shape, your investments will have more time to recover as well.
If you still have plenty of time before you plan to retire, you shouldn't have to worry too much about this recession. Retirement preparation takes decades, so even if it takes several years for the economy to fully recover, that's a relatively short period of time in the grand scheme of things. You might need to boost your retirement fund contributions down the road if your investments have taken a hit recently, but you might not need to alter your long-term retirement plans.
Nobody knows just how long it will be before the economy recovers and life returns to normal. By being flexible and continuing to prepare for the future the best you can, however, you can set yourself up for success in retirement.