Cryptocurrency News

Cryptocurrency News

Cryptocurrency News
It’s hard to find someone who hasn’t been impacted at least in some way by the COVID-19 pandemic. Even if you were lucky enough to avoid your own health crisis, your financial situation has likely gone through some sort of change.
For retirees, the situation may look grim. According to Fidelity Investments, 165,000 people with 401(k) or 403(b) plans through the company made early withdrawals in April alone. That’s more than double the average number for the same time period.
But even those who managed to weather the economic turmoil in the early days of COVID-19 without taking out their savings likely struggled because they still saw stocks quickly collapse. While markets have rallied strongly since the initial March slump, many people panicked and switched to cash or bonds, leaving them unable to capitalize on the rally in equities.
Bloomberg reported By mid-March 2020, just as the COVID lockdown was breaking out in the US, investors had poured in $137 billion in cash and cash equivalents, as well as a record $14 billion in government bonds in the five days leading up to 11 March. The market bottomed less than two weeks later. That is, those poor savers mentioned earlier just saw their stocks crash; they failed to reap any of the benefits when they recovered in April and May.
So this leaves many wondering: what do you do if your retirement savings lose value during COVID-19?
Fortunately, there are a few steps you can take to get back on track.
5 steps to regain control of your savings
1. Take stock of your situation
Before you can move forward, you must first take stock of where you are. Age, savings level and retirement goals are crucial in determining where you need to go next.
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If you’re in your 30s or 40s, you still have time. Even in the worst-case scenario where COVID-19 has delayed your retirement by a factor of years, your savings can still grow. Whatever your pre-COVID-19 savings plan is, it doesn’t necessarily need to change now.
Even if you are closer to retirement age and have suffered a major setback, there may still be time. If you had switched from stocks to bonds or to cash, you might not have suffered so much. Most savers slowly shift to less risky assets as they approach retirement.
Finally, you need to assess your current portfolio. If your plan was to put 60% in stocks and 40% in fixed income this year, but you find yourself with 100% in bonds and cash, take note of that and adjust accordingly. You can’t meet your retirement goals if you don’t meet your plans.
2. Keep Contributing as Much
Economic situations have definitely changed for millions of savers. Careers were also altered and paralyzed. But if you can, there’s more reason than ever to continue contributing to what you were or even more to your retirement savings.
According to Nerd Wallet, the stock market has returned about 10% on average every year over the last century. Even if earnings go down to half that, and even if you only have 10 years left before you retire, your contributions will make a huge difference.
Just look at these two scenarios. If you only have $10,000 in your savings, a 5% annual return will only net you $16,289 in ten years. But if you have R$10,000 and you contribute an extra R$500 per month, you will end up with R$93,785.
You can find this online calculator from Bankrate useful for your own planning.
It doesn’t matter if you’re young or old, continuing to contribute will allow you to maximize the benefits of compound interest.
3. Assess your risks and goals
You really should do this every year anyway, even during years when the markets haven’t been on a roller coaster. But now, as the dust settles a little on the COVID panic, it’s even more important to take a step back and find out what level of risk you’re comfortable with. From there, you can set goals based on that assessment.
If you don’t take this time to assess how much risk you’re actually willing to take, it can be all too easy to give in and just hoard money or
[cryptocurrency news uk] not save. And, in addition to risk assessment, a sober view of your goals will allow you to put your savings back on the path to achieving them.
This is a good time to consider the “100-minus-your-age” rule of thumb. A 30-year-old, for example, would put 70% of their savings in stocks. A 60-year-old would only put 40% of his savings in stocks.
As you assess your risk tolerance and goals, you can use this rule and adjust it to suit your own path to retirement.

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