Right now, we are experiencing something some of us have never experienced before and something that some of us will never experience again. We all know that the effects of COVID-19 so far have thrown the markets for a loop. Likewise, there are several things you need to know regarding your retirement plans and how COVID-19 has affected them.
- Your Retirement Savings Will Drop
If you have not already checked the status of your retirement savings accounts, you might want to. As a result of COVID-19, the markets have likely reduced your retirement savings. While this may cause panic, we want you to know that there are options regarding what to do with your retirement accounts. One option comes from the recent CARES Act. With its passing, the CARES Act allows individuals to withdraw up to $100,000 from their 401(k) plans without penalty. While we understand the necessity to withdraw, we highly recommend not withdrawing when the market is at a low because you will not have it in retirement.
- Early Retirement is More Common than Before
Unfortunately, as a result of the coronavirus, millions of Americans have filed for unemployment due to losing their job. For those that are older in age, finding a job post-coronavirus will be a challenge. Layoffs have increased across the nation, and while this is a tough spot to be in, you are not alone. What you can do if you fall into this category is re-vamp your resume and virtually network. There is no harm in forming new connections and seeing if you can do business with others in your industry.
- Hold Off on Claiming Social Security
While it may be tempting to ease your financial anxiety by withdrawing from your Social Security, this might come back and haunt you in the future. Your checks will be smaller now if you choose to claim your benefits. However, if you are in a situation where claiming benefits early is your only option, we would be happy to help work with you throughout the process. Claiming and delaying your benefits both have different effects. Deciding on which Social Security option is best for you depends entirely on your individual situation. If you have already filed to claim your Social Security early, you can reverse it within 12 months of registering if you choose to do so. Visit www.ssa.gov for more information.
As the coronavirus has taken a huge hit on everyone, we at Bernard R. Wolfe & Associates want to reiterate that we are here to provide guidance and help in any way we can. We are here to work with you regarding the hardships that the coronavirus has placed on your financial future. Though we are continuing to work remotely for the time being, you can reach us by phone by calling the office at (301) 652-9677 and using the dial-by-name directory.