Planning for retirement can be a daunting prospect under normal circumstances. But with COVID-19 wreaking havoc on the stock market and causing IRA and 401(k) balances to crumble, it can be hard to keep a clear head. Here are a few tips that will help you keep your cool -- and stay on course -- as we navigate these uncertain times.

1. Be flexible

The recent stock market downturn may, unfortunately, alter your retirement plans. If you're hoping to retire this year, or even next year, you may need to rethink that and give the market extra time to recover. It's too soon to tell when that recovery might happen or what it will look like, so the key is to be as flexible as possible. Rather than fixate on the things you're giving up (retiring when you want to), focus on the opportunities you might have by delaying that milestone. For example, if you were planning to retire this year at age 66 and claim your full monthly Social Security benefit, delaying retirement for a year or two will allow you to boost that benefit and lock in a higher monthly payment for life.

Older man and woman at table with notebook, documents, calculator, and laptop


2. Keep extra money in cash

If the recent market crumble has taught us anything, it's the importance of having cash reserves at all times. First of all, if you're nearing retirement, you should have a chunk of your savings in cash -- enough to potentially cover a year of bills or more so you can ride out market downturns throughout your senior years. Additionally, it's important to have emergency savings for unplanned expenses or scenarios, whether it's home repairs or the effects of a global health crisis. In addition to keeping some of your retirement savings in cash, have a good six months' worth of essential living expenses in the bank. Incidentally, that's something worth doing at any age -- not just as a means of retirement planning.

3. Focus on the future

The stock market may appear to be in pretty bad shape right now, but remember, this isn't the first hiccup it's faced -- nor is COVID-19 the first health crisis that's impacted it. The market has a strong history of recovering from downturns and letting investors who stay the course come out ahead, so don't drive yourself crazy checking your IRA or 401(k) balance every other day. Instead, focus on continuing to excel at your job so you're able to keep at it as long as you want, and spend your time thinking about the things you'll do once retirement does arrive. And also, continue funding your IRA or 401(k). The good news is that now's a good time to invest on the cheap, so if you stick with your regularly scheduled retirement plan contributions, there's a good chance they'll really pay off.

4. Don't dump your stocks

Tempting as it may be to unload your stock investments at a time like this, don't. You only lock in losses when you sell investments while they're down, so while it may be nerve-wracking to see those lower numbers in your portfolio, don't panic or make rash decisions.

There's a lot of uncertainly in the world today, and when you're trying to map out your retirement, it can make for a very stressful situation. The best thing you can do, therefore, is to stay calm, adjust your plans as necessary, and remember that this period, too, shall pass. And with any luck, you'll be in a strong position to retire once it does.