Knoxville financial planner’s retirement advice during pandemic: Don’t panic

Investigations

KNOXVILLE, Tenn. (WATE) — The COVID-19 pandemic is forcing many people to take a hard look at their financial future.

A recent nationwide survey shows 6 out of 10 American s are more concerned about their retirement today compared to a year ago, and most of their reasons are financial.

At Blue Ridge Wealth Planners, it’s been a busy time for John Vandergriff since the pandemic began.

In guiding the finances for his clients since mid-March, the coronavirus has created unemployment uncertainty for some coupled with stock market volatility for others.

He says over the last five months, the investment market has has some of wildest swings in modern time from high to low then back to high.

“In about a twenty-day period, we had the fastest 30 percent drop in the stock market that we have ever had in history,” Vandergriff said. “Ever since the first quarter of this year, the market has rebounded. So we are actually back at all time highs with the stock market right now which is hard to believe after a pretty significant drop four or five months ago.”

Vandergriff says when the economy shut down at the beginning of the pandemic that affected the short and long-term retirement plans for many.

“Well I think it’s done two different ends of the spectrum,” Vandergriff said. “It’s forced some people to an earlier retirement than they thought they would have because maybe their job went away, or they ran a small business that wasn’t able to function after the economic shutdown.

“So you’ve had some people into a scramble mode of how can I make retirement work. Then you get the other end of the spectrum where people have lost money and maybe haven’t had the recovery that some areas of the market have. So it’s moved that retirement back.”

He says to get a retirement plan back on track you need to reassess your risk.

Your investments should be diversified and have appropriate risk for your age. Then review your goals: How much money might you need in retirement? For the young investor the key is to stay the course.

“Too many young investors when they watch the market, they get emotional with it,” Vandergriff said. “But the reality is they don’t need this money yet. As long as they are in a place where they have a good emergency savings fund, which is OK if it is not making a lot of money, but they leave their 401(k) in (the market) … and keep themselves employed somewhere.

“They don’t need this money for a 20- to 30-year period potentially, so you can take as much risk as you can because this is the time of life that rewards you for taking that risk.”

Despite the financial chaos the pandemic has created, it will end, eventually.

“I think whenever things do open back up you will see a large boom in the travel industry because people are ready to get out of the house and do something,” Vandergriff said. “So, I’m pretty optimistic about what the future looks like. But at the same time, we are optimistic but plan for the worst case.”

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