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The Impact Of COVID-19 On American’s Long-Term Savings – What You Can Do Differently to Prepare for the Unexpected

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Q1 2020 hedge fund letters, conferences and more

A new survey finds 58% of Americans report COVID-19 has negatively impacted their long-term savings, and 54% worry the worst is yet to come for the stock market. I have Pamela Yellen, a financial investigator and two-time New York Times best-selling author, with:

Impact Of COVID-19 On Retirement Savings – Prepare for the Unexpected

“What if you were forewarned two years ago that in March of 2020, we’d be in the grips of a pandemic and there would be a shutdown of virtually the entire economy?” Pamela asks. “What would you have done differently if you had known:

  • Tens of millions of people would lose their jobs and many others would have their hours and pay cut?
  • The government would step in and provide stimulus, but it could take a two months or more before you receive it?
  • Stock market volatility would return with a vengeance and your plans for retirement could be upended for years or even a decade to come?”

Selling Investments At A Big Loss

Most people have the majority of their retirement savings in 401(k)s and IRAs, which come with many restrictions and penalties if you need access to money to get through a tough financial period. In addition, it can mean being forced to sell investments at a big loss. But this is not the case for people who keep a sizable emergency fund in secure and liquid financial vehicles. To prepare for the unexpected, Pamela recommends:

  1. Put more money into a safe and liquid emergency fund that you can access when you need it.
  2. Diversify your retirement savings portfolio so you aren’t at risk of losing so much that you’ll have to postpone (possibly indefinitely) your retirement.
  3. Buy the right kind of life insurance that gives you fast access to cash while giving you more peace of mind knowing you’ve also provided a safety net for your loved ones.

To achieve all three of these goals, Pamela advocates The Bank On Yourself safe wealth-building strategy. This savings method, which utilizes a supercharged variation of dividend-paying whole life insurance, has increased in value every single year for more than 160 years. That includes during every economic bust, every stock market crash, and every pandemic. In addition to providing guaranteed annual increases and quick access to cash, it doubles as a safe, predictable retirement plan alternative that lets you know the minimum guaranteed value of your savings on the day you plan to tap into them, and at every point along the way.

“It’s not too late to keep your retirement dreams from turning into a nightmare, even if you don’t see right how you can get there from here,” Pamela says. “But you can’t keep doing things the same way and expect a different result. Now is the time to take steps to avoid having your best-laid plans scuttled again when the next Black Swan event occurs.”

About the Author:

Pamela Yellen is founder of Bank On Yourself, a financial investigator and the author of two New York Times best-selling books. Readers can get a free copy of her latest book, “Rescue Your Retirement: Five Wealth-Killing Traps of 401(k)s, IRAs and Roth Plans — and How to Avoid Them,” here for a limited time.

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