COVID and Retirement Planning
9/1/2020 1:00:00 PM

COVID and Retirement Planning

Now that we are over half a year into the pandemic, one thing we can probably all agree on is that no one really knows how long COVID-19 will continue to impact our lives. This impact extends far beyond the obvious health risks. The economic consequences have been tremendous, leading to extreme market volatility. In the early months of the outbreak, the market suffered what some called the "coronavirus crash,” one of the steepest and deepest two-week declines ever experienced. 

Since that alarming drop, the stock market has regained much of those losses, but it has certainly been a stressful period for investors, especially those nearing retirement age who are counting on their disciplined years of investing to provide a comfortable life when they retire. According to Certified Financial Planner™ Denise Rau, President of Rau Financial Group, it’s understandable that people may be uneasy, but it’s also important not to overreact to volatility in the market. 

Rau says if you understand the history of the market and how it works, you also know that ups and downs are normal. In fact, market volatility is actually what drives market gains over time. Throughout history, the market has favored investors who have the patience and discipline to stick with their investment strategies even in the face of severe market declines. For example, many investors bailed out in the uncertainty after the 9-11 terrorist attacks and the Dow plummeted 17 percent. Those investors missed out on a 25 percent rally by the end of the year. 

"Now is not the time to panic and abandon your investment strategies and plans for retirement,” says Rau. "It’s a time to assess where you are and focus on your long-term goals. Work with a trusted financial advisor to make any needed adjustments to your plan.” 

Rau offers these suggestions for minimizing stress during market fluctuations:

  • Diversify. Asset classes typically perform differently under different market conditions, so spreading your investments across a variety of different assets such as stocks, bonds, traditional savings and cash will help you manage risk.
  • Stay with the plan. As the market goes up and down, it’s easy to become too focused on day-to-day returns. Keep your eyes on your long-term goals and overall portfolio. 
  • Don’t get overconfident. As the market recovers from a rough cycle, and you’ve hung in there and come out ahead, it’s easy to convince yourself that investing is a sure thing. Becoming overly optimistic about investing during the good times can be as detrimental as worrying too much during the bad times. Have a plan, stick with it, and always strike a comfortable balance between risk and return.
  • Don’t get lazy. While focusing too much on short-term gains or losses is unwise; so is ignoring your investments. Check up on your portfolio at least once a year, or more often in volatile times like these. You may need to rebalance it to bring it back in line with your goals.

"If you’ve been working with a financial advisor, you should have a retirement plan that is designed to withstand market volatility. If that’s not the case, there’s no time like the present to start – whether you’re 30, 40 or 60. Find an advisor you trust to get your retirement goals in line with your life goals.”  

For more information on retirement planning, call (337) 480-3835 or visit 

Securities offered through LPL Financial.  Member FINRA/SIPC.  Investment advice offered through GWM Advisors, 

a registered investment advisor.  GWM Advisors and Rau Financial Group are separate entities from LPL Financial.

Posted by: Kristy Armand | Submit comment | Tell a friend


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