Question

The Time Value of Money is an important component of retirement planning. Read the following three WSJ articles and answer the questions below related to retirement.

Has Covid-19 affected retirement for many people?

Answer 1

Yes, Covid-19 affected retirement for many people. The global COVID-19 pandemic has touched virtually every aspect of oiur lives, not atleast of which is how we save for retirement.

Low uptake of CARES Act Retirement Relief - The CARES Act signed into law in March made three significant changes to the rules governing certain tax - advantaged retirement accounts. They are:

• 401(k) Loans - 4% had taken a 401(k) loan
• Hardship withdrawals- 5% had taken a hardship withdrawal from a 401(k) or IRA.
• 2020 RMDs - 5% planned to skip an RMD this year

Some people planned to work Longer despite of their retirement planning

Some people are changing their retirement strategies - Despite of receiving their retirement fund they were planned to investing their money into the wok place itself.

Other retirement tips for the COVID 19 crisis

Financial professionals preach patience when faccing a market meltdown. Withdrawing money from retirement accounts after investments have been declined in value simply locks in the losses. The best strategy is to ride out the market volatility and resist the urge to sell , especially if you are not close to retirement age. Your portfolio will most likely regain value over time.

In many cases big market declines create opportunities for savvy investors. When assets plummet in value during a sell off, it's helpful to think of them as being "on sale". If you have a taxable investment account, a crisis like the one we have just experienced is a good time to carefully evaluate new opportunities to buy stocks at a big discount. However , this is not the right time to re-allocate investments in your tax-advantaged retirement funds. Rather, you should stick to your long term investing philosophy and not changed due to short-term economic upheaval.