RENO, Nev. — It's no secret — the unprecedented coronavirus pandemic has caused financial stress for many Americans in 2020 and likely beyond.
As of mid-June, more than 42 million U.S. workers had filed for unemployment insurance since businesses across America, and right here in Nevada, began temporarily closing in mid-March, according to the Department of Labor.
As a result, a national survey shows Americans' confidence is shaken when it comes to one long-term goal: retirement.
According to surveys conducted this spring by the Transamerica Center for Retirement Studies, 23% of workers who are employed or recently unemployed said their confidence that they will be able to retire comfortably has dropped.
That unease was highest for baby boomers — born between 1946 and 1964 — that are close to retirement. In all, 32% of baby boomers said their confidence in their ability to retire has decreased due to the COVID-19 crisis.
With that in mind, the NNBW spoke with two financial advisers in Northern Nevada to find out how people close to retirement and retirees should handle their investments, and how they can keep or restore their confidence.
Kelli Tampio, financial advisor at Edward Jones, said the COVID recession gives folks an opportunity to take a step back and review their entire financial situation. That includes everything from what one has saved in their 401(k) or 403(b) accounts to pension plans from former or current employers and IRA accounts.
“With these individuals, it's important for them to clearly understand where they're short-term, medium-term and long-term money is and how it's working for them,” Tampio said in a phone interview with the NNBW. “Potentially, that means repositioning things, but not doing any major changes.”
To that end, Tampio said economic downturns, like the current COVID recession we are in, could trigger “emotional responses” from people near or in retirement when it comes to their investments. Intelligent investing for retirement, she said, should prioritize long-term outcomes over short-term needs.
“Many times when we're watching the news, we are watching what the stock market is doing that day or that time,” Tampio said. “We may have this short-term emotional reaction instead of focusing on the big strategy and the big plan, saying, ‘I have my emergency fund, I have my short-term cash of fixed-income investments that are going to take on more of a long-term strategy.'”
Jennifer Rogers Markwell, president of Reno-based Platinum Wealth Management, agreed. She added that sometimes people overreact to an economic slowdown and jump into day trading since the spread of the coronavirus has resulted in extreme stock market volatility.
Markwell, however, suggests riding out the market volatility and resisting the urge to sell.
“Day trading is when you get yourself hurt — when you're not looking based on your goals and you're trying to really time the market,” Markwell said. “No one is going to be able to time the market perfectly, no one has a perfect crystal ball. That's where it really leads back to making sure that whatever moves you're making or you and your advisor are doing together makes sense for what your overall goals are and your financial plan.
"For me, I beat the drum of financial planning.”
Markwell said pandemic has also reemphasized the importance of being diversified in one's investments. She said that her clients who are diversified in the market are doing well because “they don't have their eggs in one basket.”
Perhaps above all, Markwell and Tampio stressed the importance of having a financial consultant and consistently communicating with them.
“The pandemic has shown, in my experience,” Tampio said, “just the value of having somebody reviewing and making sure you're being the most careful in putting that strategy and plan together. If people feel comfortable with their plan and strategy and they know that it's safe and going to provide them the longevity that they need, they typically have a peace of mind.”
Added Markwell: “Right now, I'm talking to some of my clients weekly, just because strategies can change here and there, depending on what their goals are and time horizons for their investments.”
-->RENO, Nev. — It's no secret — the unprecedented coronavirus pandemic has caused financial stress for many Americans in 2020 and likely beyond.
As of mid-June, more than 42 million U.S. workers had filed for unemployment insurance since businesses across America, and right here in Nevada, began temporarily closing in mid-March, according to the Department of Labor.
As a result, a national survey shows Americans' confidence is shaken when it comes to one long-term goal: retirement.
According to surveys conducted this spring by the Transamerica Center for Retirement Studies, 23% of workers who are employed or recently unemployed said their confidence that they will be able to retire comfortably has dropped.
That unease was highest for baby boomers — born between 1946 and 1964 — that are close to retirement. In all, 32% of baby boomers said their confidence in their ability to retire has decreased due to the COVID-19 crisis.
With that in mind, the NNBW spoke with two financial advisers in Northern Nevada to find out how people close to retirement and retirees should handle their investments, and how they can keep or restore their confidence.
Kelli Tampio, financial advisor at Edward Jones, said the COVID recession gives folks an opportunity to take a step back and review their entire financial situation. That includes everything from what one has saved in their 401(k) or 403(b) accounts to pension plans from former or current employers and IRA accounts.
“With these individuals, it's important for them to clearly understand where they're short-term, medium-term and long-term money is and how it's working for them,” Tampio said in a phone interview with the NNBW. “Potentially, that means repositioning things, but not doing any major changes.”
To that end, Tampio said economic downturns, like the current COVID recession we are in, could trigger “emotional responses” from people near or in retirement when it comes to their investments. Intelligent investing for retirement, she said, should prioritize long-term outcomes over short-term needs.
“Many times when we're watching the news, we are watching what the stock market is doing that day or that time,” Tampio said. “We may have this short-term emotional reaction instead of focusing on the big strategy and the big plan, saying, ‘I have my emergency fund, I have my short-term cash of fixed-income investments that are going to take on more of a long-term strategy.'”
Jennifer Rogers Markwell, president of Reno-based Platinum Wealth Management, agreed. She added that sometimes people overreact to an economic slowdown and jump into day trading since the spread of the coronavirus has resulted in extreme stock market volatility.
Markwell, however, suggests riding out the market volatility and resisting the urge to sell.
“Day trading is when you get yourself hurt — when you're not looking based on your goals and you're trying to really time the market,” Markwell said. “No one is going to be able to time the market perfectly, no one has a perfect crystal ball. That's where it really leads back to making sure that whatever moves you're making or you and your advisor are doing together makes sense for what your overall goals are and your financial plan.
"For me, I beat the drum of financial planning.”
Markwell said pandemic has also reemphasized the importance of being diversified in one's investments. She said that her clients who are diversified in the market are doing well because “they don't have their eggs in one basket.”
Perhaps above all, Markwell and Tampio stressed the importance of having a financial consultant and consistently communicating with them.
“The pandemic has shown, in my experience,” Tampio said, “just the value of having somebody reviewing and making sure you're being the most careful in putting that strategy and plan together. If people feel comfortable with their plan and strategy and they know that it's safe and going to provide them the longevity that they need, they typically have a peace of mind.”
Added Markwell: “Right now, I'm talking to some of my clients weekly, just because strategies can change here and there, depending on what their goals are and time horizons for their investments.”
