Financial Planning Post-COVID-19

The Coronavirus pandemic shone a glaring light on the financial fragility of many Americans. With 22.2 million jobs lost during the 2020 pandemic, too many families were forced to face the consequences of having insufficient emergency savings or too much dependence on their job for income. The result is a serious rethinking of how many Americans will conduct their financial planning post-COVID-19.

From revisiting their cashflow to altering their retirement plans, people are becoming even more proactive in planning for the future, so they’re better prepared for the next emergency. Financial planning post-COVID-19 is putting a microscope over many things that may have been glossed over before. 

At Global View, we’re pleased to see this pre-emptive trend. We’ve created this guide to highlight some of the major changes to financial planning that COVID-19 has brought about, and offer tips on how to create a more stable financial future for yourself and your loved ones.

If you have a concern that is not addressed here or would like to discuss a particular issue in more detail, contact us! We’re here to help.

Chapter 1

Revisiting Cashflow and Addressing Issues

Financial planning in the wake of COVID-19 should begin with a reassessment of your cashflow. Cashflow is the path your money takes through your finances, from where it originates to where you allocate it. But cashflow is more than just a monthly budget. 

Your cashflow should incorporate your entire financial picture, from this week’s groceries to next year’s expenditures to how much you need to save for retirement. You can break cashflow into income and expenses, but each of these has more granular categories, such as regular monthly expenses, debt payments, taxes and savings. The goal is to generate enough income to cover all of your expenses, with enough for long-term savings and investing.

As you evaluate your cashflow, it’s also important to consider the what-ifs life has in store, such as irregular or variable expenses that could catch you by surprise or an inadequate emergency fund. Having a plan in place for when things don’t go as expected can help your current financial situation, your future financial plan and your investments. Having to withdraw from your investment plans early can have a major effect you may not realize until later. 

Read our blog posts:

Did COVID-19 Push You into the Sandwich Generation? 5 Tips to Juggling it All

4 Ways COVID-19 May be Affecting Your Retirement, And What to do About It

Why I Preach Debt Free? The Coronavirus! 

Does Your Portfolio Need Rebalancing? 10 Times to Check

Financial Planning in the Carolinas: Are You Aware of the New Child Tax Payments

Retirement Health Insurance: Q&A With a Financial Advisor in Greenville, SC

Chapter 2

Stock Market Volatility and Your Investments

The COVID-19 pandemic saw resurgence of stock market volatility, albeit brief. But it also highlighted the severe disconnect between stock market valuations and the economic reality we’re all in. 

With more than 10 million people still unemployed at the start of 2021 – nearly double pre-pandemic levels – the economy is still far from recovered. There may not be a full recovery until 2024. 

As we move past what we hope is the worst of the COVID-19 pandemic, it’s important to re-evaluate your investments and assess your resiliency to volatility. Now may be a good time to rebalance your portfolio, revisit your financial goals and ask yourself an important question: “What will I do if the stock market falls dramatically?”

The bright side to the volatility of early 2020 is it gave investors a chance to assess their true risk tolerance. How you handled the stock market crash in March 2020 can be a good indication of whether you need to adjust your investment strategy going forward. If you were seized by panic or sold some of your investments mid-downturn, you may want to find a more conservative investment approach that won’t expose you to such extreme market swings. On the other hand, if you were able to stick to your investment plan through the worst of the pandemic volatility, you may need only rebalance back to your intended allocation.

Either way, discuss your portfolio with a financial advisor who understands market volatility and what it means for your future.

Read our blog posts:

Investing in the World After Coronavirus – Some Thoughts 

Carolina Financial Advisors Weigh-In on Bear Market Stocks: Great Buys or Bust?

Founder of Global View Discusses Investing Post-Coronavirus 

What Past Stock Market Crashes Can Teach Us 


Chapter 3

Retiring Early

COVID-19 complicated the retirement plans of many Americans. The wild stock market swings of 2020 had severe negative impacts on many people’s 401(k) plans and other retirement accounts. Meanwhile, job layoffs and furloughs left many workers staring at a potential early retirement.

One study from mid-2020 concluded that millions of Americans opted to retire early rather than look for new jobs during the pandemic. While this may sound like finding a silver lining in a very dark cloud, retiring earlier than planned can put your long-term financial security at risk. If you have or are considering early retirement post-COVID-19, talk to a financial advisor to make sure your financial plan allows you to extend your retirement the way you envisioned it. Remember, there’s a lot more to retirement than picking a date!

There are many benefits to early retirement, such as reduced (work) stress and more time to pursue your post-retirement goals, but retiring earlier than planned also comes with risks. 

If you retire early, your savings will have to last even longer than planned. If early retirement forces you to claim Social Security before full retirement, you’ll end up with a reduced benefit and thus less guaranteed monthly income in retirement. Retiring before age 65, when retirees become eligible for Medicare, also means you may need a plan for how you’ll get healthcare insurance after you leave your job. These are important risks a financial advisor can help you evaluate and address.

Read our blog posts:

What a Job Loss or Business Downturn Means for Your Retirement 

Social Security and the Pandemic 

Business Owners: 10 Elements of a Sound Exit Plan

3 Reasons You May Want to Claim Social Security Benefits Early

Unexpected Early Retirement Due to COVID-19? 7 Ways to ‘Catch-Up’

Chapter 4

Retiring Later

On the other end of the spectrum are Americans who may be postponing retirement due to COVID-19. This can be a smart move, especially for those who’d planned to retire during 2020. Retiring during a stock market downturn can put your investments at risk, because it can mean you’ll have to withdraw a larger proportion of your portfolio to cover your necessary expenses. If you can wait to retire until your portfolio’s value has recovered, you’ll start off on a much more stable foot in retirement.

As with early retirement, there are pros and cons to retiring later than planned. 

In addition to giving your investments time to recover, delaying retirement can let you delay taking Social Security. Each year you postpone claiming your Social Security benefits until age 70, your benefit amount can increase by 8 percent. Retiring later can also allow you to continue contributing to your retirement accounts, thus increasing the total savings you retire with. Another perk: You may be able to stay on your employer’s health insurance plan, which can be a huge cost savings for retirees under Medicare age.

The obvious downside to delayed retirement is that you’ll need to keep working. You may not get to spend as much time with loved ones and will have fewer years to check off your retirement life goals. One compromise may be to use this opportunity to ease into retirement by slowly cutting back on your hours rather than jumping in cold turkey.

Read our blog posts:

Can I Still Retire?

How Long Will Your Retirement Be? A Longevity Calculator

3 Reasons You May Want to Claim Social Security Benefits Later



Chapter 5

Estate Planning

The COVID-19 pandemic also highlighted the importance of another key element of financial planning: Your estate plan. Mortality and health concerns reminded investors of the risks they face and the reality that they may not have as long as they think, or there could come a time when they can’t handle their financial affairs alone. An inadequate estate plan can exacerbate an already dire situation.

If you’re new to estate planning, talk to your financial advisor about a trust. Most people think of a will first when they think about estate planning, but a trust can be an even more effective estate-planning tool. Without an estate plan, it’s up to the law and probate to determine where your assets get distributed after you die. Putting your assets into a trust can avoid this often long and expensive process. A trust also enables you to control exactly how your assets can be used after death and to appoint someone who will take charge when necessary.

If you already have an estate plan, this is a good opportunity to revisit it. Has anything changed in the wake of COVID-19? Perhaps you’d like to add clearer end-of-life directions or adjust the investment strategy used. Estate plans should be living documents, meaning they need to be reviewed and updated at least once a year.

Read our blog posts:

Are You Prepared for the Unexpected? 

How Serious Illness or Disability Can Affect Your Retirement Plans 

estate planning concept with related word cloud on tablet pc

Estate Planning in the Carolinas

Chapter 6

Emergency Plan 

Are you prepared for an emergency? The COVID-19 pandemic brought this question front and center for many people around the world. This is a great opportunity to create or fine-tune your emergency plan. Sit down with your family to discuss how you can prepare and respond to the different types of emergencies that are most likely to happen where you are, from another pandemic to natural disasters.

Your emergency plan should include items such as evacuation or shelter strategies, emergency contacts and how you will survive financially if big expenses or job changes leave you strapped. Having a master list of accounts and pertinent information that family members can access can also be extremely helpful. Make sure to include the vital documents that may be needed during an emergency, such as birth certificates, passports, Social Security cards, immunization records, estate planning documents, medical directives, insurance documents and financial information.

Of course, it’s also wise to have an emergency fund. While a rule of thumb for people currently working is to have at least six months’ worth of living expenses in a safe, cash or cash-equivalent account, you may want to have even more available – especially if you’re nearing retirement or are in a field with less job security or irregular pay. Having adequate cash reserves on hand can go a long way to not only preparing you for an emergency, but also bringing peace of mind that, if and when one occurs, you’ll be able to get through it safely.

Read our blog posts:

A Master List and a Virtual Vault

How to Get Your Retirement Confidence Back After COVID-19

Why Have an Emergency Fund? Coronavirus! 

At Global View, we’ve been following the pandemic and the effects it has had on our clients very closely. For more COVID-19-related financial and retirement advice, search through our Coronavirus-inspired blog posts here. 

You can also download this free resource: Retirement Checklist: Is My Retirement Going to be Sidetracked by Coronavirus?