No matter how prepared you thought you were for retirement, it’s likely that the last year had some impact on that. 2020 was definitely not easy on North Americans planning for retirement!
Some people lost their jobs. Others lost investment money as stock prices crashed. And still others simply lost faith in the strength of the economy.
Regardless of the reasons, almost everyone planning for retirement had to reassess their financial goals, and possibly even seek out the advice of a professional financial planner.
According to a Harris Poll for Empower Retirement and Personal Capital conducted between April 2020 and December 2020, a serious change in attitude over personal finances has occurred.
Even with the stock market rallying and cryptocurrencies like Bitcoin reaching new highs, only 22 percent of the survey respondents said they felt good about their financial future in December, a noticeable drop from the nearly 30 percent who said they felt optimistic back in April.
Two-thirds of those surveyed stated they were planning for future lockdowns and possible loss on investments. In a word, people are wanting to feel more in control of their financial future as retirement draws near and the pandemic drags on.
Regardless of what you are planning for the new financial situation in 2021, try to implement some of these ideas when you’re deciding how to plan for retirement.
Consider a Reverse Mortgage
One solution many people 62 and older are turning to is a reverse mortgage loan. If you’re approved for a reverse mortgage loan, you’re able to tap into your equity without having to worry about making mortgage payments unless you choose to.
You can also stay in your home until you decide to sell. With interest rates currently very low, it’s one of the most financially sound types of loans you can take advantage of in an uncertain world.
To see how much of a loan you might qualify for, you can visit the online reverse mortgage calculator at https://reverse.mortgage/calculator from All Reverse Mortgage Inc.
Save Your Cash
It might sound simple, if not downright old-fashioned, but saving as much money as you can is still a good idea in the 2020s.
Just because you’re entering your retirement years doesn’t mean you won’t be facing down some surprise emergencies, like a car that won’t start or a water heat that will no longer heat.
Financial experts will tell you to always keep at least the equivalent of six months of your salary (or former salary) on hand just in case of an emergency.
One of the pitfalls of the pandemic has been excessive money printing, which is, for the most part, devaluing the dollar while hiking inflation.
As a hedge against that, you might want to consider allocating a portion of your savings into something that is more likely to appreciate over time, like Bitcoin or gold.
Invest in Your Child’s Future
With student loan forgiveness one of the possible financial perks of the new presidential administration, folks who are planning for their retirement years might think about encouraging their kids to seek out more affordable higher education as well.
The Harris Poll states that while some parents believe the pandemic has had a negative impact on their children’s education, others believe new opportunities in higher education will emerge due to student debt forgiveness.
If you plan on helping your kids with paying on their student loans, debt forgiveness will allow you to put more money away for your retirement future.
Keep Retirement in Mind at Work
It doesn’t matter if your retirement is right around the corner or decades away, you should always be thinking about your retirement years.
That means taking maximum advantage of your employer’s matching contributions on retirement funds.
If you’re unsure how to go about taking advantage of a work plan, connect with your human resources department to get information about all your financial options, like increasing the percentage of your retirement savings.
Turn Your Health Savings Account into Retirement Cash
Did you know that any unused funds from your health savings account (HSA) can be turned into cash for your retirement? When it’s time for you to use your HSA, it’s best to consult with your employer to determine the best way to do this.
HSAs can assist you in paying for qualified medical procedures and expenses, plus prescriptions, medial tests, vision care, and dental work.
But if you haven’t used your entire HSA allocation by the time retirement comes, you can transfer it into funds for your retirement account.
Seek Professional Consultation
In the end, it’s always a good idea to consult with a certified financial planner before implementing a retirement strategy that will work for you and your family.
Because of the 2020-2021 pandemic and the financial instability that’s come with it, many people are focusing their attention more on monetary fundamentals, like decreasing spending, increasing savings, and doing their best to safeguard their investments.
The best way to achieve those types of goals may be to hire a financial planner whom you can trust with your retirement future.
Making the best choices on how to plan for retirement isn’t easy, but by incorporating some money management tips and savings strategies, you’ll be enjoying the golden years of retirement before you know it!