It's no secret that COVID-19 has been hammering the economy since cases started multiplying back in March. Not only have investment portfolios dropped, but retirement plan values have sunk across the board. In light of that, it's not surprising to learn that 89% of employed and recently laid-off workers who are planning to retire within the next decade are worried about the financial impact COVID-19 will have on their plans. That's the latest from a Personal Capital survey, which also found that while about 63% of pre-retirees felt prepared for their senior years before the COVID-19 outbreak, only around 52% feel the same way now.

How will COVID-19 affect near-retirees?

The effects of the ongoing pandemic could be huge for those people who are planning to leave the workforce within 10 years. Specifically, about 37% say they won't be able to enjoy the retirement lifestyle they wanted because of the financial hit they expect to take, and a little over 40% say that COVID-19 will delay their retirement plans.

Older man at laptop resting fingers on chin


How to forge forward with retirement -- in spite of COVID-19

Though COVID-19 may affect your retirement, it doesn't have to destroy it completely. If you're hoping to retire in the very near future -- say, within a year or two -- then you may need to rethink that idea, especially if your 401(k) or IRA took a massive hit recently. But if you're five years away from retirement, there's no reason to assume you can't keep your original target date.

That said, you will need to make some smart moves during the pandemic to avoid having your plans sorely derailed. For one thing, try your very best to leave your existing retirement savings alone. The CARES Act, which was passed in March, does allow for withdrawals of up to $100,000 from a 401(k) or IRA that can be taken penalty-free if you've been affected by COVID-19. But it pays to explore other options for getting your hands on cash, whether that means borrowing against your home or taking out an affordable personal loan. Not only will withdrawing from your retirement plan leave you with less money for your senior years, but it could also mean liquidating investments when they're down and locking in serious losses.

At the same time, it pays to keep funding your retirement account if you still have a job. Since investments are still relatively cheap, you have a key opportunity to build up your 401(k) or IRA in a cost-effective manner.

Finally, make sure you have a solid emergency fund so that if your income takes a hit at some point this year (or an even worse hit than the one it's taken already), you won't be forced into unhealthy debt just to keep up with your bills. Once you rack up debt, it can take years to pay it off, and the money you throw away on interest could be money that goes into your retirement account instead.

It's not surprising to see retirement confidence wavering at a time when the country is deep in the throes of a major economic crisis. But if you do your best to leave your savings alone and keep funding your 401(k) or IRA, you may find that your plans ultimately aren't spoiled at all.