How to Prepare for Retirement During a Pandemic

Retirement planning is hard at the best of times, and so is preparing for anything during a pandemic. So retirement planning during a global pandemic can feel impossible. The volatility of many stocks and markets can make many retirees or those close to retirement feel uncertain of how to proceed. For some, this uncertainty makes them feel like they need to recalculate how much they’re spending in retirement. For others, it means considering pushing retirement back a year or two. No matter how you’re feeling or what your specific circumstances are right now, these tips can help you continue to prepare for retirement even during a pandemic.

1. Reassess your risk tolerance.

If your portfolio is well balanced and matches your risk tolerance, you should still feel comfortable even with minor losses, knowing that you’ll recover. Investing within your comfort level is crucial and will ultimately help protect you in situations like this. The closer we get to retirement, the lower our risk tolerance is simply because of a reduction in time to make up for any dips or losses. If your portfolio reflects your risk tolerance, you should be comfortable to wait for any losses or drops to recover.

2. Commit to not making any reactionary moves.

The chances of retirees needing to draw from their investment portfolio in that first year or two of retirement are slim. You’ll most likely be drawing from a savings account and maybe pulling a bit of money from your RRIF. For most, the lion’s share of their investments won’t be needed for at least a few years. This means that there’s time for things to recover as the markets improve. Panicking when things dip or perform poorly can lead to quick decisions that end up costing you money. The best course of action is to stay the course and not make any reactionary moves out of fear. 

3. Look at further diversifying.

The best thing you can do right now is to reassess how diverse your investment portfolio is. A lot of risk comes from having a high percentage of your investment portfolio committed to just one or two investment types, such as stocks. Make sure your portfolio is well diversified to protect yourself from specific market losses or poor performance. Have you considered alternative investments?

Alternative investments are a terrific way to diversify your portfolio. When it comes to retirement planning, you want a plan that offers the least amount of risk while preparing you to live off of your savings and investments for as long as you need. Investing in mortgage pools through a MIC can offer that protection while still providing an excellent opportunity for growth. Get in touch with Jordan on our team today to learn more and find out if mortgage investing is right for you.