The year 2020 has been tumultuous, to say the least, with its unstable market and shrinking investor portfolios due to COVID-19 concerns, and high profile protests. If you are currently planning your retirement or are already retired, you may need to make some modifications in order to fulfill your retirement goals.
What can you do? If you are close to retiring, you may want to consider delaying your retirement for a few years in order to meet your desired destination corpus fund. You might also consider reflecting on your investment strategy if your income has decreased or you are experiencing lower returns than anticipated. Many people right now are discovering that they can find ways to monetize their hobbies and skills in order to create additional income.
It’s also important to evaluate the current economic situation carefully before choosing new investment products and what your new present-day risk appetite is. It is also prudent to keep in mind that diversification of investments is still essential. Expenses must also be taken into account and reduced in any way possible. Nearly everyone has been required to reevaluate their financial and other priorities this year, and those nearing or in retirement should too.
If you have debts, now is the time to pay them off if possible. No one can predict what the future will bring, so thinking long-term is smart. Some people will have to be fairly aggressive about this, such as moving into a more affordable residence or being economical and frugal in other ways, such as their mode of transportation. Paying off debts quickly will reduce your interest burden and loan tenure. Only consider taking advantage of mortgage and other moratoriums if absolutely necessary.
Lastly, although this may be an unpleasant task, keeping your will updated will help to protect your family and heirs from financial burden and solidify who to and how your assets should be distributed in the event of your death. This is recommended even if you are young or mid-career.
*This should not be considered financial advice. Always consult a financial professional.