Retirement in the New Normal - Part 1

Jason Grover, AIF® | February 03, 2021

Retirement in the New Normal: Part 1

We are all painfully aware that the pandemic and its effects have changed life as we know it for the foreseeable future, if not forever, and this includes how and when we retire. For that reason, our February Edu-Blog series will focus on retirement in the “new normal”. It’s clear we are not done with the coronavirus and it’s wreckage. However, the longer the virus is around, the better we get as a country at managing it.

Day by day, we are learning how to navigate everything from education to business, retail, retirement, and healthcare in a pandemic environment. We are getting so good at it, that we are starting to choose to do things differently than we would even in the “old normal”. I’m thinking of things like working from home, online meetings, ordering groceries, staying at home more, etc… These changes touch us physically, economically, and psychologically. So, it’s no surprise that the way we will prepare for, or live, in retirement will be impacted by all this rapid fire change.

There are two specific ways your retirement may be affected by the new normal and I wanted to start this month’s discussion by taking a look at what may have changed retirement for you. Now, this is a high level look at what has changed because of the pandemic, the remaining blogs in the series will share ten tips for managing the pandemic’s effect on retirement and retirement savings. We need to understand the landscape and see if our retirement plans need triage before we decide the best way to navigate retirement as a whole.

Job Loss When Planning Retirement

Across the country, in every industry, in every sector, we are seeing Americans being furloughed or laid off. It feels like corporate America is tenuously waiting to see how everything turns out before making any big moves. If you are planning to retire in the immediate future, this will surely throw a wrench in the works. With anything there are winners and losers and the sectors effected by the pandemic are no different.

The sectors and industries where job loss has been amplified by the pandemic in order of hardest hit are:

Airlines
Casinos & Gaming
Oil and Gas Drilling
Restaurants
Auto Parts & Equipment
Leisure Facilities

If you are employed in one of these industries, chances are your income has changed, or will change, due to the pandemic. On top of that, it is likely that these industries will be slower to recover than others.

Now that I have made you depressed, let’s look at the industry's least affected by the pandemic. And beware, these are not really exciting or warm and fuzzy industries either.

Property & Casualty Insurance
Multi-Line Insurance
Life & Health Insurance
Industrial REITs

My point here is that if you are in one of the harder hit sectors and you are planning to retire shortly, you probably want to sit down with your financial advisor. Now is the time to review where you are, how you can safeguard your current retirement nest egg, and plan for pandemic related issues that may affect your timeline.

Forced into Retirement Before You Were Ready?

What if the pandemic forced you into retirement? Perhaps you are not yet retirement age, you still have working years left, but you are getting pretty close to retirement. And then, with a snap of its germ-riddled fingers, the corona-economy whiplashes you into early retirement and you didn’t even hear it coming. Don’t worry folks, it has happened to many of us and it happens even when there isn’t a pandemic pummeling the economy like Godzilla.

If this has happened to you, you can leverage your skills to navigate what I like to call the short-term pre-retirement job hunt, with more ease. In the corona-economy, with all its new rules of engagement, the most sought-after skills are things most of us are more than capable of. They are things like creativity, teamwork, communication, and critical thinking.

And don’t be too fast in thinking that some millennial is going to steal your job opportunities before you hit the pavement anew. Nope, companies are looking for seasoned and experienced professionals. They need people who have the strength and know-how to navigate adversity and are strong out of the box. Training seasoned professionals requires a bit of software and protocol training but the experience is what most companies are looking for across industry and sector in this new normal.

Of course, you are familiar with what your connections and network can do for you. However, if you find yourself on the hunt for a new job rather unexpectedly in this tense job market, leveraging your allies and finding the jobs that don’t get advertised but need people with your experience is key. People typically focus their job search on industries that they are already in. Look at the skills you have that are transferable. If you are in a struggling industry, now is the time to take those transferable skills, leverage the power of your network, and get employed!

Insecure About Your Retirement?

Let’s face it, we are all going to be insecure about our retirement NO MATTER what we do or how much we have. Add a pandemic, tenuous economy, and volatile market to the mix and you have a Molotov Cocktail of retirement insecurity. That is why, for this month’s series, it’s important to start with plugging the dam. If you may lose your job, or have lost your job, and retirement is on the horizon, then income security is the very first hole that needs to be plugged.

I hate change, I really do, and this pandemic thing is hugely inconvenient for my sense of stability. While most people don’t like change, as we get older, we like it even less. We want the security of a predictable routine because it feels safe and it’s comfortable. Change is inconvenient, scary, and often painful, however, with forced change we have to accept it and then roll up our sleeves and tackle things head on. I hope I have encouraged you and brought some peace of mind if your retirement includes plugging the dam of pandemic-induced job loss.

If you find yourself in a precarious position due to this corona-economy, I strongly recommend you speak with us right away to see exactly how retirement ready you are and to learn what can be done to ensure your retirement is the pure bliss you imagine it to be.

P.S. If you enjoyed what you've read here and found it beneficial, we encourage you to share it with your friends and family. I firmly believe that an educated investor is more confident, which leads to healthier finances and fewer sleepless nights.

Until next time...

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