If the recent COVID-19 crisis has you feeling a little overwhelmed about retirement, you’re not alone. Uncertainty leading to global market volatility can seem alarming when it comes to your retirement accounts, but it doesn’t have to be.
It’s times like these where comprehensive financial planning is more important than ever, and there are a few steps you can take to help take control of your retirement—even in challenging times.
Don’t Panic, Your Retirement Can be Rescued
First, don’t panic. Anxiety can adversely impact your physical, emotional and financial wellbeing. It’s very common to make sub-optimal financial decisions based on our own biases, personal history, and in the heat of the moment, especially during a pandemic. Yet, there are things we can do to help us maintain our long-term focus. Try not to check your 401(k) balance too often. Remember, it’s about time in the market, not market timing, and the numbers you see today are not the end of the story.
In the midst of market fluctuations, there are steps you can take to help shore up your retirement accounts, and our special upcoming webinar on Wednesday, June 24 at 4:00 p.m. ET will provide some key tips on exactly what those look like.
Solutions to Help Protect Your Assets
When it comes to navigating the COVID-19 landscape, you may be among the many who need a little help rethinking your strategies for retirement.
Even though some individuals are planning to delay retirement while others have paused contributing to their retirement plans (and some business-owners have suspended matching contributions to employee accounts), you need not fear the future.
One of the most effective strategies for times like this is diversifying your tax exposure. This type of planning doesn’t just help shore up your accounts for your retirement years — it will help provide you with the cushion you need in the event of physical or mental incapacities that prevent you from working.
For the average investor, most accounts fall into three basic taxation categories:
Consistently Taxed: Think: accounts like investment brokerage accounts, some types of checking accounts, money market accounts, etc. Essentially, this category includes accounts that provide dividends, capital gains, interest, or capital gains distributions. These gains are typically taxed the year of distribution.
Tax-Deferred: These types of accounts don’t require you to pay until you make a withdrawal if held to retirement. Think: 401(k) and 403(b) accounts.
Tax Advantaged: Roth IRAs, some types of life insurance, and interest generated by municipal bonds all fall under this category.
Diversifying your tax exposure means creating a portfolio with a healthy mix of accounts that fall into all three of the above types of tax categories.
The tricky part?
Recent shifts in tax laws have changed the landscape for those who have IRAs, 401(K)s and other qualified retirement plans. On the one hand, the Tax Cuts and Jobs Act and the SECURE act have provided a number of opportunities (and challenges) for investors. On the other hand, the COVID-19 crisis and the CARES act have created unforeseen challenges in retirement planning.
Is your head spinning? We’re here to help you navigate how to redefine and rework your retirement planning in the wake of COVID-19.
Take Control of Your Retirement
Join us Wednesday, June 24 at 4:00 p.m. ET for a special webinar with Arthur Gravanis of Guardian’s Business Resource Center, where you’ll get tips and information about:
The current retirement environment
How you can take advantage of the new tax landscape
What the SECURE Act is and how it affects your retirement plans
The future of retirement tax rates
Remember, everyone’s situation is different, and as with any major financial sea change, it’s helpful to get some professional guidance.
Brought to you by The Guardian Network © 2020. The Guardian Life Insurance Company of America®, New York, NY
2020-103820 Exp. 6/2022
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