Woman in Mask Saving Money in piggy bank

Financial Planning to Reflect Our ‘New Normal’

Share This:

COVID-19 has changed everything from our jobs to school learning and shopping and how we plan for retirement. The pandemic has created implications for financial planning on critical items, moving them front and center for those saving for retirement and those already retired:

Healthcare costs.

With the Affordable Care Act’s future undecided in the U.S. Supreme Court, American’s who lost their jobs may be without health insurance. The implication of not having health insurance, primarily due to unemployment during COVID-19, creates the risk that retirement accounts will deplete to pay for healthcare. Both health insurance cost increases or unanticipated medical bills will likely impact if the twenty states and President Trump win the lawsuit.

A study by Avalere Health in early 2020 found that 12 million workers are likely to lose employer-based insurance during the pandemic, with a percentage loss of coverage among people of color is double than for white people.

Early retirement.

For the first time in fifty years, joblessness is higher for those ages 55 and higher due to COVID-19 health risks, layoffs, and terminations relating to business closings. Those facing months of joblessness and who are unable to find work are accessing retirement savings earlier. Additionally, the decision to take social security retirement benefits earlier results in a lower monthly benefit amount.

Retirement portfolios withdraw rates and a low yield environment.

Yields on fixed-income investments such as CDs, bonds, and savings accounts have been low for much of the past decade and may not offset inflation. This rate decline will require investors to save more into fixed-investment vehicles than in past decades to meet their future financial demands.

“It really calls into question what will be a sustainable retirement portfolio withdrawal rate. We’ve never seen this specific confluence of events where we have high valuations on the stock market, coinciding with very low yields on safe securities, so new retirees are coming into a constrained environment from the standpoint of what their portfolios might earn.” – Christine Benz, Morningstar’s Director of Personal Finance.

Meet with a financial professional.

Financial planning is changing and must reflect the present and our future after COVID-19. With so many unknowns, financial planning that prepares you for the future is critical to your financial stability.

Together we can create a tailored plan that takes into account the ups and downs of the economic cycle. Contact us to schedule your appointment now! 

© 2024 Trajan® Wealth LLC. Nothing in this blog is intended as investment advice, nor is it an offer to buy or sell any security. Please consult your financial advisor for questions about your personal financial situation. All investments involve risk, including the potential for loss. Trajan Wealth clients and employees may have a position in any of the securities mentioned. Portfolio holdings and other data are subject to change at any time and without notice. Additionally, the above links provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. These materials are for informational and educational purposes and are not designed, nor intended, to apply to any person’s individual circumstances. It does not take into account the specific investment objectives, tax and financial condition, or particular needs of any specific person. Please consult with your legal and/or tax advisor before making any tax-related decisions.