According to a recent survey by the Plan Sponsor Council of America, 16.1 percent of organizations have suspended matching employer contributions due to financial hardships caused by COVID-19. Worse yet, 1.3 percent of businesses have terminated their 401(k) plans altogether.1 Millions of Americans rely on their 401(k) and matching employer contributions to bolster their savings for retirement.
Investments can be stressful enough as is. There is always an ever-present concern about losses you may sustain due to market shifts. The kind of changes we've seen due to the pandemic is the largest volatility spike linked to a disease in outbreak history. As a firm we council long term goals and investments, the market historically has always come back and stronger than ever.
While COVID -19 restrictions ease, there are many people who are staying home in an effort to help slow the spread of the virus. There are still many unknowns about the virus, including how the effects will impact us in the long term. And while many are of differing opinions about the pandemic, one thing the situation has shined a light to for many people is about the need for estate planning.
Before we retire, we need to answer the question: How are we going to be supported financially after I stop working? This holds especially true for those of us that are self-employed. The need to have savings and retirement plans has become more apparent in the midst of the current COVID-19 crisis. You have options, and below are a few of those outlined.
With the financial impact of COVID-19, sources of income have been uncertain at best and nonexistent at worst. No matter where you are with your income, there are options. For those individuals between the 62 - 70 age range, it's possible to begin claiming Social Security benefits. And while I would recommend waiting as long as possible, this may be what you want to do. Please read on for some considerations and notes on the subject.
Since the pandemic has hit, many of us have been uncertain about what the future may hold. As we go through these times, retirement seems like it's out of the question for some of us. And while that may be true, I encourage you to look through your plans carefully and if you need consulting, please don't hesitate to contact me and we can look through things together. Below are some of the ways your 401(k) may have been impacted.