Are You Still on Track to Retire?

Jay Gershman |

The Coronavirus has posed a threat to many American’s health as well as current financial well-being, and has left many unsure about the future of their retirement security. We’ve seen the unemployment rate rise drastically over the last 7 weeks due to the economic devastation from this pandemic, and people without jobs are unable to contribute to their investment accounts. Along with that, companies are also suffering from this crisis, and some have chosen to halt matching contributions to retirement plans. 

But all is not lost, although the coronavirus has made a big impact on the country and around the world, it’s important to look at where investors stand today versus previous years. Bouncing back from this health and economic crisis is possible, just as investors have in past recessions. If you’re wondering if you’re still on track to retire amid this pandemic, we’re going to go over some tips to help you feel more confident about your retirement savings, and ways you can keep your 401(k) on track. 


Evaluate Your Risk Tolerance

The current volatility in the market is scary, but it’s important to remember that the market is always volatile. Right now is a good time to evaluate your portfolio and assess how much vitality you’re willing to bear. Review your 401(k) asset allocation and make sure your investments are in-line with your risk. Many plans offer risk-adjusted strategies with pre-set portfolios to make investment choices a little easier for investors, be sure to look at all your options. 


Look for In-Plan Roth 401(k) Conversions 

One upside of a down market is the opportunity to do a Roth conversion in your 401(k) plan. There’s certain advantages to a conversion in a down market, as it enables investors to convert their pre-tax account balances to post-tax dollars by paying the taxes on those funds now, making future withdrawals from the plan at retirement tax-free. This could be beneficial to investors who anticipate being in a higher tax bracket when they retire. To find out if this is possible for you, contact your advisor or check your plan’s online tools for a Roth 401(k) conversion calculator. Keep in mind that any taxes due from the Roth conversion will be due in April of 2021, and will need to be paid using funds outside of the plan. 


Keep Contributing to Your 401(k) 

Due to the volatility of the market and financial situations, many people might be thinking about stopping their 401(k) contributions. But there’s a big opportunity to invest in down markets as stocks are so low. If you decide to lower your 401(k) contributions, be sure to set a reminder to check your account in a few months and, if possible, bring contributions back up to previous levels. 


There’s still a lot of uncertainty for the future, but it’s important to remember your long-term goals. Many people are still retiring in the midst of the pandemic, and it’s encouraged  if they’ve been planning for their retirement date and kept to their financial plans. For those not yet ready to retire, and worried about the consequences of all of this, organizing your finances, evaluating your portfolio, assessing how much you need in cash flow in retirement, and keeping your goals in mind can hopefully give you some peace of mind about what you’ve already accomplished for your retirement plan.