Let’s cover some of the ways that COVID-19 may impact your retirement planning in New Jersey and how to prepare for the future.
You may have to dip into your retirement savings.
While the government has been sending stimulus checks and additional unemployment benefits, this may not be enough if you’ve lost your job. To pay for medical care and other essentials, you may need to dip into your retirement savings.
Borrowing from your retirement isn’t all bad. This money may allow you to stay out of debt and keep on top of your essential payments. However, you’ll want to have a plan to pay back this money so that you have it for the future.
Your retirement savings may need to be deferred.
Another hardship is not having enough money to contribute to your retirement account. If you lost your job or had your hours cut, your retirement savings will have to take a back seat for now. Unfortunately, if you’re not contributing to your account, this can negatively affect you in later life. You may have to work harder or longer to make up for what was lost.
You may have lost money in the stock market.
Historically, investments in stocks have yielded better returns than other types of investments. This is why stocks are a good investment strategy for people who are just starting their retirement plan. However, the stock market crashed in February 2020 because of the coronavirus. Many people lost money, and you might have been one of them.
Some stocks will never recover, and some younger investors may have lost savings that can’t be replaced. But things are looking up, especially if you own stocks in industrial, tech or electric vehicles. Talk to your retirement planner in NJ to see where you should be investing your money.
Tips for Getting Back on Track
If you’ve lost money this past year, there are ways to get back on track. Here are some of our best tips for those interested in wealth management in NJ:
- Don’t make withdrawals from your retirement accounts
- Consider new investments like lower-cost stocks
- Diversify your portfolio to account for the pandemic
- Work longer to recoup some of your losses
- Avoid making fear-based decisions
Speak with a Financial Advisor in NJ Today
Leonard Financial Solutions can help you sort through your finances and determine the best ways to grow your retirement accounts even if you’ve suffered a job loss, a reduction in work hours or another pandemic-related hardship. Contact our team today to learn more about your options.