Member - Blog

How COVID-19 Has Forced Many Americans to Re-Assess Their Retirement Planning

The impact of COVID-19 is visible in nearly all aspects of American lives, including people’s retirement planning. According to a TD Ameritrade survey, almost 71 percent of adults in the country expect the pandemic to have an effect on their senior years and 21 percent think that the impact will be severe.

Retirement PlanningAnother poll by MassMutual in April 2020 showed that nearly 55 percent of Americans already made changes or were planning to change their retirement contributions. Out of this group, about 54 percent were making lesser contributions to keeping more cash on hand.

Many Americans May Withdraw Money Early from Their Retirement Plan 

The pandemic has caused panic among people. About two in five Americans or 38 percent say that this virus outbreak has affected their retirement plans. Many people are planning to withdraw money from their retirement plans earlier than expected. Nearly 41 percent of consumers feel they need to rethink their retirement plans to understand the pandemic's financial impact.

In recent months, the CARES Act increased the 401(k) plan withdrawal limit and waived the early withdrawal tax of 10 percent and federal tax withholding of 20 percent for people affected by this crisis. With this option available, now two in five Americans (39 percent) holding a 401(k) plan, are likely to withdraw early from their retirement plan.

In addition, nearly 63 percent of Americans are concerned about developing a strategy to address taxes during retirement. About 59 percent say that they are now worried about how taxes will affect their retirement income in the post-pandemic era.

How Americans Should Brace Themselves for the Potential Post-Pandemic Recession

Do Not Break Your Savings Just Yet

The value of your retirement account may have dipped during the pandemic but do not panic or rush to dump it. Taking out money from a 401(k) or IRA today means you will have less money for the retired days. If you keep your retirement savings intact, there is a good chance that it will recover over time and become better once the economy gets stronger.

 

Read Also: Things to Know About Business Interruption Insurance in the US Amidst the Coronavirus Outbreak

 

Keep Contributing to Your 401 (k) or IRA

It is a harsh reality that the pandemic has hurt people financially. Many people have lost their jobs and are clueless about dealing with issues like mortgage payments or student loans. If you lost your job during the pandemic, you have no other option but to put your retirement contributions on hold. However, if you are still working and had a pay cut, keep contributing to your retirement plan. This way, you will not lose your potential income from the retirement account. 

Prepare Yourself to Deal with an Impending Recession

Currently, the economy is reeling due to COVID-19 and the experts are predicting another recession similar to the one that occurred in 2008-2009. Considering a potential downturn, make sure you do not rack up debts and keep your emergency fund afloat. Also, try to cut back your expenses in case your income suffers another setback. 

 

Read Also: Getting Unemployment Insurance in the US During the COVID-19 Pandemic

 

Should You Consult a Finance Professional to Survive the Pandemic?

Studies show that before breaking or withdrawing from retirement plans, people are seeking guidance. An online financial survey by the Nationwide Retirement Institute in April 2020 showed that nearly one-quarter or 24 percent of American adults of 18 years or older consulted finance professionals. The ongoing pandemic has made people (48 percent) realize the need to protect their retirement income. Besides, 57 percent of US adults and 60 percent of investors have said that the current situation has made them recognize the significance of life insurance.

Before We Go

If your income is fluctuating during this uncertain time, it is better to keep your retirement account or emergency fund on standby. If you are thinking of dipping into your retirement savings due to this turbulence, resist that urge. Just keep setting aside around 10-15 percent of your income for the future. It will be handy.

If you have more questions regarding retirement planning, let us know. Give us a call at (650) 328-1000 or fill out the online contact form, and we will be happy to help you.

  • Jul 23, 2020
Become a Member to post Articles

Search In blog :

Categories :

Education Services (Schools, Tutors) (43)

Tips For Students To Improve Their Writing This Semester

Benefits of Smart Cities

Best Event Management Institutes Mumbai

You're Losing Grades by Not Using Essay Assistance

4 Tips To Make Yourself Prince2 Certification Ready

5 Skills To Be Pinned In Your DevOps-Engineer Journal

Kindergarten Readiness - What Teachers Can Do

A Sneak Peak To The Learning Carnival - Get Latest Technology Insights

NEET 2020 Exam Details

How to Make Your Students Listen to You

Advance Your Career with an Early Childhood Education Certification

6 Main Differences Between IGCSE And CBSE

What Can You Expect For NEET 2020?

A Guide To Online Learning During The COVID 19 Pandemic

NEET Chapter Wise Weightage For Subjects

Why Is Social Development an Important Part of Early Education?

New JEE And NEET Dates For 2020

Effective ‘Learn From Home’ During The Corona Crisis

Ways to Keep Your Little One Engaged at Home

Sports – An Integral Part of School Life

How to Effectively Home School your children during the Covid-19 Pandemic

Boarding School – Why It Is the Best Option

Simple Strategies to Help You Improve Your Exam Scores

Why ICSE Could Be the Right Option for Your Child

Career Options After an Early Education Program

Online Schooling: A Perspective In The Current Scenario

What Are Your Career Options in the Early Education Field?

Top 10 IBDP Terms Parents Need To Know

Child Care Center Director - Qualification and Responsibilities

How To Stay Focused During The AP Exams 2021

Tips for Effective Online Learning

Are SAT Subject Tests Required For College Admission?

Making Possible Effective Career Advancement as an Educator

Early Childhood Education Program - What You Need to Know

8 Interesting Facts About ACT

Why Students Should Take AP Courses?

Importance of Curriculum Planning in Education

10 Reasons To Choose Cambridge Curriculum For Your Child

What Is The Difference Between AI And AA In IB Math?

ECE Training and School Management

Differences Between IGCSE And IB Curriculum

What Is IGCSE And Is It The Right Choice For My Child?

How Do Early Childhood Educators Impact Children’s Emotional Development?

Health Care Treatment (51)

Ayurvedic treatment of skin diseases

Common Reasons Behind Chronic Abdominal Pain in Adults

Travelling for Surgery – Doing It the Right Way

Treating Cough and Cold with Homeopathy

What causes excessive burping?

Acid Reflux Should Not Be Ignored March 2020

Say Goodbye to Chronic Digestive Problems!

How to make your home safe for Elders

How to achieve Affordable Healthcare in India

The Importance of Regular Health Check-Ups April 2020

Diseases related to Gastroenterology and Hepatology

Do not ignore these signs of a cardiac emergency

Recognize the warning signs of brain tumour, save a life

Holistic Approach to Raising Immunity!

The Effect of Coronavirus on Mental Health

Homeopathy Can Set You on the Path to Holistic Wellness

How to deal with Traumatic Brain Injury

Healthcare in the Post COVID-19 World

Homeopathy’s Role in the History of Epidemics

A South Indian Diet Plan For Heart Patients

Peptic Ulcers: Causes and Prevention

Fever Awareness and Remedies

The Importance of Boosting Your Immunity the Natural Way

Never Ignore Head Injuries

Positive Patient Experience with Kauvery Hospital

Traumatic Brain Injury - Causes, Symptoms and Treatments

Advantages of Treating Childhood Illness with Homeopathy

Congenital Spine Defect Cured After Surgery

Managing Arthritis with Homeopathy

Health Risks While Returning to Work after the Lockdown

Cardiac Surgery During COVID Times – Restoring Hope

Urological Diseases that affect Youngsters and Elders

How to Find the Best Gynecologist

Homeopathy Can Ease Winter Illnesses

Life after COVID19 for Senior Citizens

Orthopaedic Precautions For Seniors In Cold Weather

Health tips for Elderly during COVID-19

Vaccines for New Born Babies

Gastroenteritis

Masterstroke Against Stroke

Tips to take care of the heart

Why is breast self-examination important?

Kauvery Hospital’s excellent liver transplant program

Why is a regular health checkup important?

Save Your Knees

Understanding Chemotherapy

Kidney Stones - Treatment Methods

Knowing When to Go to the Hospital

How are homeopathic medicines prepared?

Tips for Managing Spring Allergies

Ankle Sprain: Causes, Symptoms, and Treatment

Do You Have Questions?

Feel free to contact us by email. We usually respond within 24-48 hours.

Sign In LocalbizNetwork