Five Ways to Stay on Track with Your Retirement During these Uncertain Times

Five Ways to Stay on Track with Your Retirement During these Uncertain Times

 

If you are nearing retirement or newly retired, you may be getting a little worried about what the recent changes in the markets and interest rates mean for your financial well-being. These are valid concerns and we want to share five ways that may help to put your mind at ease during these uncertain times.

Build or maintain cash savings

It is important to be as prepared as possible for unexpected events. Ideally, you should have enough accessible cash to cover three years of being in retirement and the costs that come with it. This is liquid cash, not money that is tied up in any stocks, bonds or other investments. Therefore, it is not affected by the current volatility in the markets. Having this cash reserve means that you don’t need to worry about selling stocks or to scramble for money to cover unexpected expenses. This also allows you to give any stock you own time to recover after the recent market dip.

 

Postpone your retirement date

If you are in a position to do so, it may be a good idea to delay your retirement date.  Continuing to work over the coming months will make this time less stressful for you and it will allow you to build your cash savings. Also, when these troubling times subside and things are less volatile, you will be in a better position to plan the first few years of your retirement.

 

Adjust spending

This is a great time to make cuts, where possible, to your monthly spending, as self-isolating significantly reduces opportunities you have to go out and spend money. Create a new budget and focus on what your necessities are over the coming months, such as food, housing and utilities. If you reduce your need for cash, you will limit the amount of money you need to draw from your retirement savings.

 

File your taxes and get that refund

You may be due a tax refund and, the sooner you file your taxes, the sooner you can get the refund. This small influx of cash can put you in a better position with your savings. Although the deadline for submitting personal income tax returns has been extended to June 1st, there is no need to wait if you are in a position to file now.

 

Don’t worry about CPP or OAS

Do not worry about the Canadian Pension Plan and Old Age Security because they are stable. These necessary payments are not affected by the financial markets and you will continue to receive your payments if you are eligible.

 

Bottom Line

There are ways to combat the uncertainty of these times if you are nearing retirement or are recently retired and we hope our five tips will help you stay on track with your retirement. There is no way to know when the COVID-19 Coronavirus pandemic will be resolved, but there are things we can do to support ourselves to put ourselves in a better position for when this is over.

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