Investing in your 401(k) is an idea that is hammered into our brains at a young age. We are constantly reminded of it because setting aside an amount of money on a consistent basis for the future will make a significant difference when we approach retirement. This simple task can turn out to be difficult when living in a global pandemic. The COVID-19 crisis has taken a major toll on the economy and has resulted in many people experiencing new situations and making difficult decisions regarding their 401(k)’s and how to plan for the future.
Financial concerns stemming from the coronavirus outbreak have been felt all over the world with people attempting to navigate a crisis that has no precedent. The uncertainty surrounding the disease has led to hysteria among all global economies. Many have felt this impact in their 401(k). While 401(k)s decline and years of earnings disappear, it is important to take a level-headed approach to help navigate the craziness.
The following guidelines could help keep your 401(k) on track and protected during this global pandemic (disclaimer: the following content is intended to be used for informational purposes only. It is recommended that you discuss with a professional investment advisor prior to making any investment decisions).
- Avoid rash decisions
- It is important to take a step back and make well thought out decisions when it comes to your future.
- Assess your current situation
- Assessing your current situation before making a decision will help you achieve a better perspective that you may not have had before.
- “Don’t let the fear of striking out keep you from playing the game.”
- The famous Babe Ruth quote reigns true during these times. Uncertainty in the economy can lead to immense opportunities for success so one must not be afraid to take chances.
- Temporarily reserve cash
- If after assessing your current situation you do not believe it is best to invest in your 401k, perhaps due to a significant loss in current income, then it may be best to simply build up a savings account. This would result in liquid funds and could assist in any immediate expenses that unexpectedly arise.
- Change your plans
- Failing to plan is planning to fail. Plans change so do not get discouraged if it is best to push back your retirement or change your saving techniques.
While only time will tell when we can resume our normal lives, it is imperative to never neglect your financial future and take the necessary steps to help your future self.