COVID-19 and Retirement Planning: How to re-evaluate planning for your golden years post-pandemic

Empirical studies reveal that women do not adequately plan for retirement.

How to re-evaluate your post-pandemic retirement planning?

The COVID-19 pandemic has thrown a spanner in all our plans, and the effects of this will be felt for a long time. Among other things, the pandemic seriously impacted the retirement plans of millions of Indians. Women, in particular, will be significantly impacted by this financial setback. Considering they have to make their resources stretch for longer to support them in their old age, empirical studies reveal that women, in fact, do not adequately plan for retirement.

However, it’s never too late to get back on track. How to plan for retirement in COVID-19? Should COVID-19 change your retirement strategy? Addressing these questions and more with a blueprint of actionable items will give you more clarity to secure a comfortable retirement. Read on to find out more.

Re-evaluate your retirement timeline

The economic impact of this black swan event may have affected your retirement horizon. In addition to losing some income, other unplanned expenses such as treatment for COVID-19 or other ailments, emergency travel, setting up a work-from-home infrastructure, etc., may have eaten into your savings. 

In such a scenario, you may have to consider working for longer than expected. This may, however, be a challenging proposition if you’re employed in a professional setup with standardised retirement brackets - a challenge we’ll address next.

Related: 5 Retirement Planning Blunders To Avoid

Look for alternative revenue sources

Having income coming in from alternative sources can save you from putting in more years than you would want to. Not only will it help you stay on track with your retirement goals, but it also acts as a buffer against income uncertainty in the future. Look for freelancing roles and consulting opportunities, or leverage a skill to create additional revenue streams.

Use your regular income to take care of expenses and other financial commitments, and deploy the income from your side hustle solely towards your long term retirement needs.

Don’t defer financial decisions

Women who have been procrastinating on their various personal finance needs may have borne the worst brunt of the pandemic. If you’re one of them, take this as a lesson to set things right. First, take charge of your own financial decisions rather than depending on other family members. Next, get yourself adequate health insurance. This will safeguard your healthcare needs now and in the future - you’ll need it most in your old age.

Take a hard look at your financial standing. To be able to set and achieve your goals, it is important to know where you want to get to. Hire a financial advisor who understands your needs and can provide the right guidance. They will be able to suggest the best retirement plan in India 2021 and beyond and arrive at a suitable investment and asset allocation strategy.

Related: How Women Can Overcome These Unique Retirement Planning Challenges

Rejig your assets

A large number of women are known to be conservative investors. While bank deposits and other fixed-income assets provide capital security, the financial setbacks brought on by the pandemic may necessitate an aggressive strategy. 

While it is essential to have an allocation towards risk-free investments, consider shifting some savings and investments towards debt funds that can offer higher returns compared to traditional deposits and have a better tax structure.

Simultaneously, a measured approach with allocation towards equity and equity-based investments can let you recoup lost ground. Investments via the systematic route (SIPs) are flexible, budget-friendly, and allow you to generate higher returns. With consistent investments over the long term, you can mitigate market volatility and compound your savings.

Related: 5 Must-Have Investment Instruments For Retirement Planning

Structure a portfolio specifically for your retirement needs

Having a separate bucket for your retirement needs will allow you to measure progress and take any course corrections if required. In addition to having the right asset mix, it is equally important to have options that generate consistent post-retirement income. 

Pension plans like the National Pension Scheme (NPS), ULIPs, mutual funds with systematic withdrawal options (SWP) and other retirement plans can help generate a steady income stream for you. The earlier you start, the bigger the corpus - and the higher income thus generated will enable you to live your sunsets years comfortably.

Disclaimer: This article is intended for general information purposes only and should not be construed as insurance or investment or tax or legal advice. You should separately obtain independent advice when making decisions in these areas.

The COVID-19 pandemic has thrown a spanner in all our plans, and the effects of this will be felt for a long time. Among other things, the pandemic seriously impacted the retirement plans of millions of Indians. Women, in particular, will be significantly impacted by this financial setback. Considering they have to make their resources stretch for longer to support them in their old age, empirical studies reveal that women, in fact, do not adequately plan for retirement.

However, it’s never too late to get back on track. How to plan for retirement in COVID-19? Should COVID-19 change your retirement strategy? Addressing these questions and more with a blueprint of actionable items will give you more clarity to secure a comfortable retirement. Read on to find out more.

Re-evaluate your retirement timeline

The economic impact of this black swan event may have affected your retirement horizon. In addition to losing some income, other unplanned expenses such as treatment for COVID-19 or other ailments, emergency travel, setting up a work-from-home infrastructure, etc., may have eaten into your savings. 

In such a scenario, you may have to consider working for longer than expected. This may, however, be a challenging proposition if you’re employed in a professional setup with standardised retirement brackets - a challenge we’ll address next.

Related: 5 Retirement Planning Blunders To Avoid

Look for alternative revenue sources

Having income coming in from alternative sources can save you from putting in more years than you would want to. Not only will it help you stay on track with your retirement goals, but it also acts as a buffer against income uncertainty in the future. Look for freelancing roles and consulting opportunities, or leverage a skill to create additional revenue streams.

Use your regular income to take care of expenses and other financial commitments, and deploy the income from your side hustle solely towards your long term retirement needs.

Don’t defer financial decisions

Women who have been procrastinating on their various personal finance needs may have borne the worst brunt of the pandemic. If you’re one of them, take this as a lesson to set things right. First, take charge of your own financial decisions rather than depending on other family members. Next, get yourself adequate health insurance. This will safeguard your healthcare needs now and in the future - you’ll need it most in your old age.

Take a hard look at your financial standing. To be able to set and achieve your goals, it is important to know where you want to get to. Hire a financial advisor who understands your needs and can provide the right guidance. They will be able to suggest the best retirement plan in India 2021 and beyond and arrive at a suitable investment and asset allocation strategy.

Related: How Women Can Overcome These Unique Retirement Planning Challenges

Rejig your assets

A large number of women are known to be conservative investors. While bank deposits and other fixed-income assets provide capital security, the financial setbacks brought on by the pandemic may necessitate an aggressive strategy. 

While it is essential to have an allocation towards risk-free investments, consider shifting some savings and investments towards debt funds that can offer higher returns compared to traditional deposits and have a better tax structure.

Simultaneously, a measured approach with allocation towards equity and equity-based investments can let you recoup lost ground. Investments via the systematic route (SIPs) are flexible, budget-friendly, and allow you to generate higher returns. With consistent investments over the long term, you can mitigate market volatility and compound your savings.

Related: 5 Must-Have Investment Instruments For Retirement Planning

Structure a portfolio specifically for your retirement needs

Having a separate bucket for your retirement needs will allow you to measure progress and take any course corrections if required. In addition to having the right asset mix, it is equally important to have options that generate consistent post-retirement income. 

Pension plans like the National Pension Scheme (NPS), ULIPs, mutual funds with systematic withdrawal options (SWP) and other retirement plans can help generate a steady income stream for you. The earlier you start, the bigger the corpus - and the higher income thus generated will enable you to live your sunsets years comfortably.

Disclaimer: This article is intended for general information purposes only and should not be construed as insurance or investment or tax or legal advice. You should separately obtain independent advice when making decisions in these areas.

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