Do you know how COVID-19 could impact your retirement planning?
It’s understandable if your focus has been on the short-term since the Covid-19 outbreak hit the UK. Naturally, primary concern has been on maintaining the health and safety of you and your family.
Your short-term finances may have been unexpectedly dented, dependent on the sector you work in and the impact of social distancing rules. We hope that if your business or industry is suffering that you’ve been able to lean on the financial measures the government has put in place, such as the furlough scheme or Coronavirus Business Interruption Loan Scheme.
However, it is still important that you consider your financial security further down the line and review how covid-19 could impact your retirement planning.
How could Covid-19 impact your retirement planning?
The answer to that depends on where you are in your retirement planning journey. We’ll look at the various stages in turn.
If you’re already retired
There shouldn’t be any need to panic – if you’ve planned properly for your retirement, your strategy should have been designed so that any major event in the market (like we are seeing now) would have a minimal impact long-term. What you need to do now is simply allow the income planning and generation process to run it’s course.
If you haven’t devised an income strategy, or perhaps even you aren’t entirely sure what that is, then we encourage you to speak with your financial advisor.
If you plan to retire within the next 10 years
If there is a dramatic market plunge, then it could delay your plans for retirement, depending of course on how long the decline lasts. Use the time now to review the plans you have already made to secure your future income.
It’s not an ideal time to make abrupt decisions led by emotion, for example ‘panic selling’ stocks. You can read more about steps to avoid panicked decision making here.
If you plan to retire in more than 10 years
It’s imperative that you continue to make regular contributions to your retirement accounts. You may feel tempted to ease the pressure on your daily finances now, but it’s important you have an eye on the long-term.
If you haven’t had a discussion with your financial adviser about planning for your retirement, now is an ideal opportunity. Don’t leave these discussions until you are approaching your retirement age – it can mean you’ve missed the window to implement a strategy to create the financial security your desire once you finish working.
Talk to your financial advisor
We appreciate that to some, retirement seems such a long way off and therefore it’s not on the priority list. However, events like Covid-19, only go to show just how important it is to design a plan for your finances once you’re retired. Plans aren’t only about growth and investment; they are there to protect and withstand this type of market volatility.
Now is the time to take your retirement planning seriously. Our team of independent financial advisors are here to help guide your through the process. Call 02380 920 128 or email [email protected] to get started. You can read more about how we work with you here.