COVID-19 isn't just making hundreds of thousands of Americans sick; it's also been hammering the economy since it first took hold in the U.S. Not only have millions lost their jobs, but many retirement portfolios have taken a beating thanks to stock market volatility.
It's not surprising, then, to learn that retirement worries abound due to COVID-19. In fact, in an April survey by the American College of Financial Services, 93% of retirement advisors say their clients have contacted them with concerns this month, up from 66% in March. If you're worried about the impact of COVID-19 on your retirement, here are a few steps you can take.
1. Assess your retirement portfolio
The closer you are to retirement, the more important it is to shift some of your assets into safer investments that aren't subject to the same swings as the stock market. In other words, if you're in your late 50s or early 60s, it may be time to move some stock investments into bonds. And if you're within a year or two of retirement, you'd be wise to keep a chunk of your 401(k) or IRA in cash -- enough, specifically, to pay for at least a year's worth of bills during retirement. If that's not what your portfolio looks like right now, see about moving some assets around. If you're younger, however, and are loaded up with stocks in your 401(k) or IRA, there's no need to change that allocation, because you have plenty of time to ride out the market's upswings and downturns to come out ahead.
2. Don't check your portfolio obsessively
The stock market can start a given week strong and end at a low. Or, vice versa. That's why it really doesn't pay to check your 401(k) or IRA balance every day. If you do, a couple of things are likely to happen. First, you're apt to drive yourself crazy and needlessly wreak havoc on your mental health. Secondly, you may be prompted to sell investments that are down, thereby locking in losses rather than riding them out. A better bet, therefore, is to avoid checking your portfolio balance too often. A monthly review is fine, or you can even look at your investments quarterly if you're nowhere near retirement and don't expect to shift your strategy anytime soon.
3. Boost your job skills
If you're an older worker, one thing COVID-19 may do to your retirement is force it to begin earlier than you'd like it to. The longer the crisis drags on, the more likely we are to suffer a full-fledged recession, which could produce even more widespread job loss. Getting laid-off late in life is a dangerous thing to have happen, since older people tend to have a harder time finding work than younger members of the workforce, so work on boosting your job skills in the coming months to buy yourself a degree of job security. That way, you might manage to avoid a layoff -- and an early start to your retirement when you don't want one.
It's natural to worry about retirement at a time like this, but remember: Like all rough patches, this one, too, shall pass. Stick to your savings and investment strategy if it's working for you, and if you're closer to retirement, consider changes that protect your assets. And if you have a financial advisor you work with, don't hesitate to reach out and ask for advice -- that's what he or she is there for.