The Post-Pandemic Retirement Survival Guide - Part 1

Consider the post-pandemic retirement survival guide an awakening—a way to look at your retirement plan with a fresh perspective. At the least, I hope it serves as a reminder of how fragile a retirement planning strategy can be, and the ability to remain flexible in thought is so important.

Perhaps you’re one of the fortunate people not concerned about the viability of your retirement strategy. After all, markets predict that ‘normal’ is a quarter away (whatever normal happens to be). But be assured, the pundits say it’ll be magic.

They say that the pandemic and its after-effects will be poof: Gone. It’ll be like the global economies never experienced economically devastating lockdowns, a spike in mental health obstacles, and substance abuse. Also, let’s not forget the mind-blowing increase in extreme poverty.

I mean, just like that, the world’s economies will recover from the strange global quarantine of healthy people (never happened before). Oh, the lofty, idealistic haze of markets and its prognosticators drunk on fiscal and monetary stimulus.

What does post-pandemic financial recovery mean to you?

So, whatever ‘post’ pandemic means to you, keep in mind, retirees or those looking to retire anytime in the future, perceive economic recovery through a darker lens. In other words, a post-pandemic retirement may be a ‘no retirement.’ Due to personal financial setbacks, more retirees than ever are deciding never to retire.

“With the present economy due to Covid, I am afraid it will take several years to recover and for our retirement savings and investments to be enough for us to retire the way we originally set it up.”

National Institute of Retirement Security, February 2021.

Pew Research, a bipartisan research think tank, conducted a study of 10,334 adults in January 2021 and discovered that a quarter of adults 50 and older who have not yet retired, expect the coronavirus outbreak to affect their ability to retire.This includes 7% who say they have already delayed their retirement and an additional 17% think they might have to delay it.

Post-Pandemic Retirement Survival Guide, The Post-Pandemic Retirement Survival Guide. Part 1.

Don’t worry. We can work together to make sense of it all.

I truly hope your household possesses the resiliency to meet financial goals in a timely manner post-pandemic.

As part of a comprehensive Post-Pandemic Survival Guide, these three actions would be on the top of my list. My next three will appear in part 2.

Action #1: Be open to creating your own pension.

Dave Ramsey, the guru of debt management, penned a piece (or somebody did) for his blog in February 2021 titled Why a 401(k) is Better Than a Pension. Please read it for yourself. What do you think? Frankly, I found the information disingenuous, somewhat tone-deaf, and replete with paragraphs of incomplete information. It appears some staffer with limited knowledge or study of retirement trends cobbled it together.

For example, the post indicates the ‘average rate of return’ for a 401k is 12% and 7% for a pension without reference to how these numbers are derived. Seemingly, I assume that 12% is comprised of an all-equity portfolio that most investors could not stomach emotionally long-term. But, let’s say an aggressive investor does ride out the volatility and emotions are not an issue.

Are you the SPOCK of investing?

In other words, let’s imagine Science and First Officer, the highly logical, unemotional SPOCK stationed on the USS Enterprise, is a champ at socking part of his salary away in a 401k.Even if he were an above-average investment picker (and we’re not even going to tackle 401k choices), a 12% average annual return is more science fiction than reality.

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Disclosure: Real Investment Advice is powered by RIA Advisors, an investment advisory firm located in Houston, Texas with more than $800 million under management. As a team of certified and ...

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