How to Keep Yourself and Your Finances Healthy
On March 11, 2020, the World Health Organization (WHO) declared the coronavirus outbreak a pandemic. And as major sporting events are suspended and canceled, states order restaurants and bars to close, and schools transition to remote learning to prevent the spread of COVID-19, we should be taking extra steps to make sure that we stay healthy. But we should also keep an eye on the health of our retirement savings.
WHO provided advice to the public and included six protective measures we should be taking to keep ourselves and others around us protected against the coronavirus disease. These same tips can be applied to retirement accounts and savings for those at or nearing retirement.
Avoid Touching Your Face and Your Savings Account
If you have come in contact with the virus, touching your face and your eyes, nose, and mouth can make you sick. Therefore, we should be extra careful to avoid that physical contact.
In addition to avoiding touching your face, you should avoid “touching” and meddling with your retirement accounts. One of the best ways to do this is by setting up an automatic investment plan. An automatic investment plan will routinely contribute to your IRA, 401(k), and other retirement accounts on your behalf. That way, you avoid all those times you’ve dipped into the money you’ve saved for investing when you shouldn’t have. As a result, your retirement accounts will continue to grow.
Minimize Germs and Account Fees
Washing your hands properly with soap and water, or an alcohol-based rub like hand sanitizer, is one of the best things you can do to protect yourself from contagious diseases.
In addition to minimizing germs that could make you sick, you should minimize account fees because they may be harming your savings. One way of doing this is by consolidating the number of companies where you hold your accounts. Each company you have an account with comes with a variety of fees: trading, management, and advisory fees. By having multiple vendors, these fees can be hard to keep track of. You should consider consolidating your various accounts with as few companies as possible. Having all your finances in one place makes it easier to see and manage your fees and your entire retirement picture.
Practice Social Distancing with Your Stock Portfolio
We should be maintaining a 6 feet radius from everyone to avoid transmitting any illnesses through person-to-person contact. As companies are instructing employees to work from home and school districts are closing schools, we should be limiting our interactions with others. We can do this by making sure we have the necessary supplies at home to minimize the number of times we leave our homes and interact with others. This can mean making sure we have enough Vitamin C and other medications at home so that if you start to feel symptoms, you can safely remain at home.
In the same way you might want to hold onto any medications or necessities, you should hold onto the stocks in your retirement accounts. The current market volatility might be unnerving, but don’t give in to the temptation to sell your stocks. By panic-selling, you’re locking in your losses. As the market has historically always recovered, it will recover this time, too. Hold on to your stocks (and your vitamins) and reap the benefits of long-term gains on your retirement accounts.
Maintain Respiratory and Financial Hygiene
If we are sneezing or coughing, we should be protecting those around us and practicing good respiratory hygiene. We can do this by coughing or sneezing into our bent elbow or a tissue. If you need to go outside, you should wear protective masks to minimize the spread. That way, we keep our germs to ourselves and protect those around us.
Practicing respiratory hygiene is a great way for you to look out for yourself and others around you. Another great way to look out for yourself and those around you is by making sure you have your financial documents in order and keep track of important dates like the Medicare open enrollment period.
Recently, the deadline to file your 2019 taxes moved to July 15, 2020. This gives you extra time to prepare your documents. Separately, as you consider your 2020 taxes, being organized and diligently maintaining receipts and important tax documents will make the tax process for you, or any tax professionals you work with, much easier and more efficient. By having a clear tax process, you minimize the chances of making inadvertent mistakes which can save you from costly penalties that can take away from your retirement savings.
Seek Medical or Financial Help
If you start to develop symptoms such as a cough, fever, and difficulty breathing, seek out medical attention and call your healthcare provider in advance. They will advise you on the best practices for your particular set of symptoms.
The same applies to your financial advisor. If you have any lingering questions and want to learn ways you can minimize taxes and fees on your retirement accounts, don’t be afraid to seek out your financial advisor or contact us.
To protect yourself from the coronavirus, be sure you stay informed with the latest information and developments from national and local public health authorities. That way, you’ll be aware of whether it’s spreading in your area and how to best protect yourself and your family.
Similarly, one of the best ways to ensure that your retirement accounts are healthy and as protected as they can be is by staying up to date on the latest policy changes so you know how they affect you and your savings. For example, ten states have changed their state income taxes in 2020, and there were changes to Social Security and Medicare for 2020. These changes affect millions of Americans. Stay up to date on the latest policy changes to understand how they may be affecting your retirement savings.
As the government is implementing ways to contain the spread of the virus on a larger scale, there are ways we can be protecting ourselves and those around us on a smaller scale such as by washing our hands, practicing social distancing, and more. It is important to apply these healthy practices to our retirement accounts during this time.