Posted by The TaxAdvocate Group, LLC

Impact of Coronavirus for Retirees’ Finances

Impact of Coronavirus for Retirees’ Finances

Everyone is affected by the Coronavirus pandemic. Retirees on a fixed income will feel the effect even more. Retirement accounts no longer hold the same value, and the interest on a savings account has considerably decreased.

Of recent, however, the government adjusted the Medicare and Social Security programs to favor retires. This article will explore how COVID-19 pandemic affects retirees.

Social Security Offices Are Closed

The COVID-19 pandemic necessitated the closure of non-essential businesses with the intention to contain the virus. Social security offices nationwide were also closed around mid-March. Some services, like scheduled appointments, happen via phone.

Besides, the payments will continue as directed through direct deposits or postal services. Retirees involved will have access to such services via an online platform or the internet.

Medicare will handle Telehealth Services

For the duration of the COVID-19 lockdown, seniors and Medicare beneficiaries do not have to visit the doctor's office. They can communicate with them from home. Medicare will pay all charges incurred by these contacts with the health practitioners (nurses, doctors, and clinical psychologists).

Besides, since seniors and retires are pretty much prone to the virus and its side effects, it is a service worth taking. There will be a lot of services available remotely, like evaluation, office visits, mental health counseling, health screening, etc. The charges for these virtual visits will be the same as typical office visits.

Loss in Value of Retirement Accounts 

One source of significant stress for people is helplessly watching the account balance go down without any means to save it. As a result, it is a good idea to reduce or delay withdrawals in a bid to weather the storm of the pandemic.  This gives your account time to recover. Besides, it removes the temptation of selling your assets when the values are down. It helps to consider means to delay the purchase and decrease spending. This way, your investment asset gets enough time to recover, rather than selling at a loss.

This is the time your emergency funds or saving account will come in handy. It is a better option compared to withdrawing from your investment account. In addition, if you need to withdraw money for anything, we recommend taking the minimum only.

Lower Interest Rates on Savings Account 

One of the effects of the Federal Reserve's interest rate cut is the reduced interest rate on the savings account. One way around this is to consider a savings account with better interest rates compared to the one you currently have. This is where online savings account come in. They are worthy alternative as FDIC insures them. Also, users enjoy a pretty high-interest rate.

A certificate of deposit is a good idea for your money. We highly recommend this if you will not be using your savings anytime soon. With a certificate of deposit, you can save your money for a given amount of time. Be sure, however, that you have enough income coming in via social security or pension. This is important, so you will not have to remove it from your CD prematurely.

Reduction in Recreation Spending 

The stay at home order comes with some perk if you consider it—no more costs for entertainment, recreation, takeout's, etc. Sporting events, going to the movies, vacation travels, dinner dates, etc., are all expenses that are out of the way. This reduction in expenses can provide a cushion effect on your retirement budget.

Avoid Making Financial Decision in a Panic 

It is not a good idea to make a sudden adjustment to your financial plan in moments of panic. This calls for rational and strategic thinking for your retirement investment. You can even consider a consultation with a financial retirement planner or adviser. 

Make sure you examine your options, have a plan, stick to it, and don't let fear and anxiety control you. This can help you weather the storm without issues.

The TaxAdvocate Group, LLC
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