Shock-Proofing Your Retirement Funds Over Coronavirus FearsApr 9, 2020 | 0 Votes by Justo - rate Although isolation and social distancing are a proven way to slow COVID-19's infection process, you have to learn how to protect your funds during this dire situation.
The whole world is put on hold due to the COVID-19 pandemic and the world economy is now suffering the consequences of such hard quarantine periods. Although isolation and social distancing are a proven way to slow the infection process, lots of people around the world are worried about their savings and retirement funds by not being able to go to work and spend money on food and living essentials. Fear not, as in this article, you’ll learn how to shock-proof your retirement funds in times of fear due to the Coronavirus.
Stay Right Where You Are
When it comes to being immersed in a bear market like the current one, it’s important to keep calm and stay still; at least for a bit. Going with the flow and involving in panic purchasing or selling all your stock or bunds will only be detrimental in the end. Use your available cash or credit card balance first before recurring to your savings and retirement funds.
For this, it’s important to manage your expenses for the coming 4 months to up to 2 years in order to allow the market to organically restore and recover without representing a hassle for you and your family. If you’ve been saving money for quite some time, you’d certainly have enough money to survive without affecting your retirement funds’ APR.
Reasses Your Fund’s Risk Tolerance
If you have planned to retire by the time you are 50 and COVID-19 effects on the stock market are putting on halt your plans, it’s vital to reassess your retirement plan completely and even consider to retire at a later time. When the market is unstable, it’s vital to create a new budget and investment plan that can cover your living expenses and allows you to continue investing on your funds without taking a toll on your finances.
On the other hand, if your finances were in red numbers even before COVID-19 struck the market, being able to create and stick to a tighter budget and waiting to apply for government or creditors’ help is advised.
Don’t Cash Out Your Account
In times like this, when the stock market gets shaken up, it’s important to trust your broker more than ever. Although banks may start to cancel loans and other products, making people get nervous, it’s vital for your future to not make sudden economical moves. This translates to not cashing out your funds and savings accounts and not selling your stocks or bunds out of fear, as this will only make you love money, interests, and your entire retirement plans.
We all know it’s easy to panic and try new investment strategies in a bear market; however, if you are investing in a retirement plan and have been doing it for years, that means that your current investment strategy has worked. Simply trust your guts and keep calm while things calm down and stabilize again. If you follow these tips, you’d be able to continue living and investing without putting your funds at risk.