Retirement Planning During the Coronavirus Pandemic: 4 Critical Strategies


The coronavirus pandemic has likely attacked your finances on several fronts. Your retirement portfolio may be worth less, you may have lost your job, and you may be turning to credit cards to keep the bills paid. Any one of those outcomes individually can affect your retirement plan for the worse — but all of them together can be disastrous.

Retirement plan disasters, however, can be mitigated. Try the following four strategies to minimize the long-term effects the coronavirus pandemic has on your finances.

Middle-aged man looking serious

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1. Delay retirement

If you have a way to keep making money, it’s a solid strategy to delay your retirement temporarily. Ideally, you still have a job. But if that’s gone by the wayside, could you pick up consulting or project work that can be done remotely?

Reach out to all of your contacts right now and let them know you’re on the market. If possible, offer friends, family, and acquaintances some incentive for making appropriate introductions. You might return the favor or, depending on your area of expertise, give away some of your services.

When you postpone retirement and hold off claiming Social Security, your monthly Social Security benefit increases. This works in two phases.

  1. Your monthly benefit will increase by up to 42% if you delay your claim from age 62 until your Full Retirement Age (FRA). FRA is based on your birth year, and it’s between the ages of 66 and 67.
  2. Once you reach FRA, your benefit continues to increase by two-thirds of 1% for each month you put off your claim. These increases stop when you reach the age of 69.

A higher monthly Social Security check reduces the amount you have to pull from your savings each month. And that means you can keep more of your money invested and producing returns over time.

2. Slash spending

Budgeting discipline will be critical as you work through these tough times. If you’re newly unemployed, try slashing your spending enough to survive on unemployment alone. That will help you keep credit card spending to a minimum until you can get back to work.

You’ll have some temporary help in this, thanks to the CARES Act. This federal stimulus package added a $600 weekly supplement to your state’s standard benefits. You’ll see this supplement in your unemployment income through July 31.

In a perfect world, you’d live on less than the supplemented unemployment income and stash the excess in your emergency fund. That way, you’d have extra cash reserves to help out once that weekly supplement expires.

Even if you’re still working, spending less now protects your retirement timeline by supporting higher savings and emergency fund contributions. If you’re not sure where to begin cutting back,…



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