COVID-19 and Your Retirement: What you need to know

COVID-19 has had huge consequences on our economy. As Nurse Anesthetists, many of you have felt its effects directly and in real-time because we’re dealing with so many immediate issues. It’s hard to envision future issues that COVID-19 may cause.

But being clear-headed about COVID’s long-term consequences is vital, especially when it comes to your retirement planning.

Here’s what you need to consider:

We can no longer rely on Social Security to ensure a stable retirement.

Even before the pandemic, experts predict that Social Security could be depleted by 2035 — people are living longer and as a result, they are drawing from these funds for a longer period of time.

Now, the COVID-19 crisis has pushed that date up by 2 years to 2033.

Why? Because business closures and job losses lead more people to retire earlier. We saw this in the 2008 financial crisis, when over 5% of all retirees, aged 62 and up, started to claim their benefits early.

The extensive drawdown of Social Security means that there is a possibility that future retirees will receive a much smaller income from this source.

We cannot rely on Social Security for reliable income during their non-working years.

Today’s working professionals must create rigorous and dynamic retirement plans to ensure financial stability in the future.

Working with a financial advisor who can help devise a plan suited to your situation is a must. Many CRNA’s have diverse working profiles, so working with someone who can assess your unique financial situation is a wise strategy to ensure financial stability in the future.

No matter your situation, creating a retirement plan that gives you a guaranteed stream of income is a wise investment. We cannot rely on Social Security alone. We need to develop a stream of income using annuities as a foundation for a secure income.

What are Annuities?

Annuities are investments that give you guaranteed income throughout your life, even if the entire value of the annuity is depleted before you die.

There are three different types of annuities — fixed, fixed index, and variable.

Fixed annuities tend to pay higher rates than other guaranteed instruments, like Treasury securities, savings bonds, and CDs. They also guarantee the protection of your principal.

Indexed annuities use a crediting period. Once the interest has been credited, the owner of the annuity will not lose money even if the market dips.

Variable annuities are different from fixed and indexed annuities because it is actually possible to lose money. Variable contracts are invested in mutual fund sub-accounts that invest directly into stock, bonds, and real estate markets. The investor can lose money when markets decline, but they will make significant gains in a bull market with 100% of the growth credited to sub-accounts.

Because they provide a guaranteed income, adding annuities to your investment portfolio is a valuable asset for your retirement plan.

Given the ramifications of COVID-19, annuity investments are smart tools to better position you for a secure and reliable source of income during your non-working years.

It’s time to start making your money work for you. Get ready for retirement with greater stability and clarity.

To find out how to incorporate annuities into your investment and retirement strategy.

Talk to a financial advisor.

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