Financial Impact of the Coronavirus on Boomers' Retirement Plans

We have been hearing several painful stories from several sources, of how the coronavirus pandemic has devastated the finances of American citizens all across the nation. Their loss may be due to the death of an immediate family member, the stock market crash, unemployment, or another financial loss.

The baby boomer generation has less time left than other generations to recover from a financial loss due to the coronavirus pandemic, since many are approaching retirement. One-third of baby boomers had no savings for their retirement before the pandemic started. The situation has only become worse, forcing many to take out loans, such as no credit check loans, to cover expenses. Many of the boomers who had a few more working years left before reaching their retirement age have lost their job during the coronavirus pandemic layoffs; they may not find a new job at all. In fact, they will be now left with less money for retirement.

Financial planners recommend that boomers should continue to try to look for another job even if it is a lower-paying job. This will prevent them from tapping their savings. People who continue to work generally remain healthier and have better mental health.

Here are some financial impacts that could happen to a large percentage of baby boomers:

  1. They may have less money for retirement, less money in their 401K and IRA accounts.
  2. A shorter professional career, or a lesser-paying next job.
  3. Making the situation worse, many boomers may withdraw money from the stock market when it is already at a lower level.
  4. They may completely lose trust in the stock market and will invest money in lower-return investments like bank CD’s and bonds.
  5. They may avoid going to senior care nursing homes because many senior citizens died in these facilities from coronavirus due to their mismanagement. Many will select more expensive retirement-life options.
  6. Post-coronavirus many companies may require the ability to work from home and adapt to newer technologies. Many boomers may not be able to adapt to these changes and may have a much harder time looking for a new job.
  7. Not only may boomers be left with less savings; they may start using their savings a lot before hitting retirement age.
  8. Many boomers may be financially taking care of loved ones, like kids, friends or a spouse, who needed money during the coronavirus pandemic.
  9. Boomers reaching retirement age often face age-discrimination at their workplace or when applying for a new job. A tight job market due to coronavirus will only make matters worse.
  10. Boomers may not be able to pay all their bills on time, like medical bills, credit card and utility bills. They may have to face the debt collection calls from a hospital collection agency. Those operating small businesses may face collection calls from a commercial collection agency. Collection cost and interest are usually added to late payments, further digging a hole in their pockets.
  11. Some boomers may have no choice other than filing for personal bankruptcy.

The coronavirus pandemic has been the most significant financial disaster for many baby boomers. Many of us will feel frustrated and angry about all the problems, especially because they developed with no fault of our own. Recalibrating lifestyle and re-strategizing retirement finances may be the only sensible option for all of us. 

 




Comments

Be the first to commment on this article.

Post a Comment