Recent surveys have indicated that many of us are rethinking our retirement plans because of COVID-19. In fact, one survey from the nonprofit group Life Happens suggests that a whopping 43% of Americans say they plan to postpone and continue working past their retirement date because of COVID.
As a financial professional, this is troubling for lots of reasons. And while it’s impossible to make blanket statements or give advice that fits the masses, there are three important questions you need to ask yourself before delaying your retirement.
Before you make a decision to postpone your retirement, it’s important that you make an honest assessment of where you are – and how you got there. Ask yourself:
Intuitively, working in your retirement years and saving more will add to your retirement nest egg because you’ll be adding money versus withdrawing. But, if your asset allocation remains inconsistent with your retirement goals and risk profile, then could be setting yourself up for disappointment.
One piece of good news is that if you postpone your retirement and keep working, you can elect to delay collecting Social Security benefits, which will have a significant impact on your monthly benefits.
For example, you can increase your monthly Social Security benefits by 8% for each year you delay collecting after you reach your full retirement age. If that age is 66, for example, you can increase your monthly benefit by 32% by delaying until age 70.
No matter what your situation, it’s important to remember the words of Mike Tyson when he said,
“Everybody has a plan until they get punched in the mouth.”
Think about that.
The reality is that planning for the future is really tough right now. There are so many variables that you need to consider and so many assumptions you need to make.
Your financial professional can help you make sound financial planning decisions based on your risk tolerance and your goals.
Don’t go it alone.
No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.
The information provided is not intended to be a substitute for specific individualized tax planning or legal advice. We suggest that you consult with a qualified tax or legal advisor.
Asset allocation does not ensure a profit or protect against a loss.
This article was prepared by RSW Publishing.
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