What The Pandemic Has Revealed About Retirement Plans
This year has been a real eye-opener for many pre-retirees and retirees. Over the years, most people heard warnings and advice from retirement advisors about various aspects of their plans.
The warnings were based on a combination of data and anecdotes and often didn’t hit home or inspire urgency. But the Covid-19 pandemic compressed many events into a short period and affected the entire country. Suddenly, the concerns weren’t theoretical or something to worry about years from now.
A long stock market boom also overcame a lot of gaps in plans, or seemed to. When the market indexes dropped quickly in March, The state of many plans suddenly seemed more perilous. Here are some of the key problems 2020 revealed in many retirement plans and how you can solve them.
When the markets drop quickly, you don’t want to sell assets at a panic low. You want to hold on to stocks and other investments for the recovery. But some retirees had to sell near the bottom, because they had expenses to pay. Their plans didn’t have an emergency fund or other source of liquidity. Selling stocks to pay expenses is a good plan when markets are rising. But when stocks have tumbled you don’t want to sell at depressed prices.
Read more @Forbes
