Financial Planning During COVID-19

We’re only now coming to realistic grips with the COVID-19 pandemic and its effects. For the last year and a half, this deadly pandemic has upended our news, our plans, and our world. What once seemed so simple and straightforward has taken on new urgency and life all around us daily.

It almost goes without saying that our notions of personal finance, and our financial priorities, have shifted - dramatically, in some cases. We’re preparing for the worst while hoping for the best, and taking steps to make sure our careers and our families are safe and taken care of. If we didn’t think about this before the pandemic, the situation has certainly changed. We don’t have the same choices as we did before.

But just because our priorities have shifted doesn’t mean they have to catch us off guard. We can adjust our outlook and our strategies to better compensate for our changing world. The basics are security, adjustment, diligence, and carefully considered goals - all good traits we used before for our financial planning. We’ve just now shifted our targets, and changed the trajectory for our goals and our timelines.

Before anything else, we have to discuss health.

There’s no point in saving and careful financials if you’re neglecting your health or your estate and your will. While COVID-19, generally speaking, has a very good prognosis, the simple, sad truth is that nearly 700,000 Americans have died from this disease. Many thousands more have accrued tremendous medical expenses from hospitalization and medical care related to the virus. Millions have taken time off from work to quarantine, rest, and recover from their bout, generating more debts and costs. COVID can also leave lingering health effects that will cost us in the long run.

Considering our health insurance options can help us prepare to pay for possible COVID-related expenses. Many workplaces offer health insurance of different tiers and levels. Understanding the health insurance available is an onerous task, but one that we do well to pay attention to. Is it complicated? Yes, it can be. Be sure to explore the health insurance offered by your company, if applicable. Don’t just pick the cheapest one, or the most expensive just because it sounds fancier. Take an honest stock of what each offers, what your contribution will be, and what you’ll get in return. Take the time to chat with an HR or benefits administrator, if available, at your company to understand the upsides and the downsides of each insurance.

While preparing for the worst, we have to think about how we plan our estate, and possible medical expenses in the future. Among other things, we should be considering:

• Power of attorney for health care

• Last will and testament

• Trusts, if applicable

Our good health and our retirement are closely linked. We want to be healthy and active and financially secure in our retirement age. We should consider saving for retirement when we’re younger. Starting in your 20s has always been a safe bet that pays off. The longer horizon you give yourself for financial preparation is best. The more you have accrued, the better you can handle the unexpected aspects of life while preparing for the ones you’re looking forward to. If you’re younger during this pandemic, this is the perfect time to start seriously considering it.

If you’re entering retirement during COVID or have done so within the last few years, continue monitoring investments very closely. If you’re concerned about death imminently, take steps to mitigate that risk. Ensuring portfolio investments are distributed properly and equitably to chosen beneficiaries can mean working with advisors and planners to assess risk and benefits. Planning for estate taxes and various costs is essential early on. Organizing and funding a trust is often a good strategy for early retirement and estate planning, especially when one has just started a family.

Just because COVID has changed our financial priorities and shifted our attention to different outlooks doesn’t mean it has to catch us off guard, or make us anxious. If it all seems like too much to do on your own, consider a financial planner. Financial planning involves working closely together to tailor a plan to your needs. Your current age, risk tolerance and your time horizon are factored in to lay the groundwork for a successful financial life. Strategic financial planning for emergencies, like COVID, doesn’t have to frighten or terrify us if we approach it realistically, diligently, and with a focus on security.

Neither New York Life Insurance Company, nor its agents, provides tax, legal, or accounting advice. Please consult your own tax, legal, or accounting professional before making any decisions.