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- Retirement is a big life change for most people, and the coronavirus pandemic isn’t making it any easier.
- Financial adviser Chip Munn predicts the combination of economic uncertainty, physical isolation, and the health crisis make the current climate feel riskier than usual.
- Munn says a “holistic financial planning” approach, where goals and strategies are revisited with current context, is more important than ever.
- SmartAsset’s free tool can find a financial adviser to help with your own retirement planning »
A financial-market downturn spurred on by a global health crisis is enough to make anyone concerned about their money.
But the coronavirus pandemic has only intensified a sense of trepidation that’s already present for many people in or nearing retirement, Chip Munn, financial adviser and CEO of Signature Wealth Strategies, a South Carolina-based advisory firm, told Business Insider.
“The scariest day of most adults’ lives is the day that they have their last earned paycheck clear the bank because that’s kind of the moment of truth, and that’s when you find out whether or not you really have done the things that you need to do because there’s not any more earned income coming in,” says Munn, who is also the author of the new book “The Retirement Remix.”
“March and April have been some of the most, both financially and emotionally, volatile times in recent history,” he tells Business Insider. While most retirement-age Americans remember going through past economic crises and emerging on the other side, he says, the “million-dollar question” — “Will I have enough money?” in retirement — is more profound than ever.
Financial risk feels amplified by the health crisis and physical isolation
Social-distancing measures have kept most Americans in isolation and, by effect, toppled stocks. Millions of workers have lost their jobs or been placed on unpaid leave and the economy as a result has taken a nose-dive. Not to mention the health crisis itself. According to data sourced from Johns Hopkins, over 869,000 people have been diagnosed with COVID-19 and nearly 50,000 have died from the disease in the United States to date. And hospitalization rates are far higher for people over 65, the CDC reports.
“It really amplifies the magnitude of that question” of whether you’ll have enough money to last through retirement, Munn says. “Right now, the risk isn’t necessarily higher today than it normally is or it has been, but it definitely feels that way for a lot of people,” he says. In fact, before the coronavirus gained a foothold in the US, the economy was in better shape than before the 2008 crisis, he says.
Unlike national financial or health crises of the past, these three factors — the unpredictability of the markets, physical isolation, and the threat of becoming infected — are converging at the same time to make the current climate feel much higher-stakes for people nearing or in retirement. Munn says that makes a “holistic” approach to financial planning more important than ever before.
“Historically speaking, ‘hold on and ride it out’ has been good advice,” he said. “The problem is right now you don’t have anything to distract yourself from whatever it is that you’re feeling. And so I think that holding on, staying the course, is that much more difficult to actually follow through.”
- Read more on managing your money in this tumultuous time:
- 3 options for people struggling to pay their mortgage during the global health crisis
- 4 reasons to get disability insurance, even if you don’t think you need it
- If you’ve been financially impacted by the coronavirus, you may be able to pause payments on these 8 bills
- How to get a stimulus check from the US government, which could pay up to $1,200 if you qualify
- In response to the coronavirus, credit card issuers like Amex and Capital One are letting customers skip payments without interest and more
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