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Pandemic Proof Your Retirement

Updated: Feb 14, 2023

While the economy all but halted and the stock market's erratic movement during the start of Covid-19, you’ve likely watched your own retirement savings plummet. It was a worrisome moment for many invested Americans. And, even more worrisome for individuals nearing retirement age. If you've decades left of your career, you can feel the warm cocoon of knowing the market will recover by the time you reach your retirement. But what if you are planning to retire within the next 12 months?

How do you prepare for economic downturns and a possible recession? How do you pandemic-proof your retirement plan?

Here are 4 immediate actions you can take to protect what you’ve built.

US currency Benjamin wearing a mask

1. Create a Cash Bucket

Set aside three to four years of spending in savings or low risk bond funds. A treasury bond fund or an investment grade corporate bond fund may be a good idea. This cash bucket is the shock absorber to market movements on stocks in your retirement portfolio. Harvest dividends and gains from your retirement portfolio to refill the cash bucket.

2. Eliminate Unnecessary Expenses

It may seem silly, but small things add up. Do you really watch 600 cable channels or can you get by with a $79 month internet and cable package instead of shelling out $199? Making this simple change could save you $1,500 a year. Each year review your bills and cut where you can.

3. Protect your Assets

You have $4 million in real estate and investment accounts. Are you protected if you are in an accident and seriously injure someone? Are your accounts titled to be out of reach from a legal judgment?  Do you have adequate umbrella liability insurance? Review your health insurance policy to make sure you are covered, especially for chronic conditions or expensive drugs. You never know what tomorrow will bring.

4. Update your Will and Estate Plan

Name beneficiaries to inherit your property, name guardians for your children or grandchildren. Identify someone to take care of your pets or leave money to charity. Create a power of attorney for your finances and your healthcare. If your estate is more than $11 million ($22 million for a couple), lower estate taxes by working with an attorney.

Final Thought:

Don’t stress about the possibility of a recession. Instead, think carefully and strategically about what you are doing with your money today.

Peak Wealth can guide you through the financial shift from career to retirement.

Other Useful Resources:

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About the Author

Peter Newman is a Chartered Financial Advisor (CFA) and president of Peak Wealth Planning. He works with individuals nationwide that have accumulated wealth through company stock, ESOP shares, real estate, or running a business. Peter applies his unique background to help clients achieve their specific goals and enjoy peace of mind.

Peak Wealth Planning provides concierge services to meet your wealth management needs. Services include: financial planning, investment management, esop diversification, retirement income, insurance, and estate planning advice. Peak Wealth Planning is a fee-based financial advisor based in Champaign, Illinois, and Fraser, Colorado.

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