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How The Pandemic Is Likely To Affect Your Retirement Plan

So, as I feared, March madness has been cancelled, along with all professional sports events, Broadway shows, and each day there are more closures and reports of travel restrictions. A pandemic has been officially declared. This is a new one for all of us. We will get through it. Right now we are getting hit hard economically. And we don’t know when the punching will end.

My position is as it has always been. Sit tight. Take all of the recommended safety precautions. And know that “this too shall pass.”

People Want To Know If They Should Keep Contributing To Their 401k

In a recent New York Times piece, readers who are still working are wondering if they should keep contributing to their 401k. That, in my opinion, is a bit premature since we don’t know how long this situation is going to last. With the warm weather on its way and the end of flu season, it’s impossible to know just how long this is going to drag on. We do know that it will taper off and come to an end, eventually. We can hope that the end comes sooner rather than later.

Back to the question, should you continue contributing to your 401k or keep your cash on hand? According to the New York Times piece, the answer is: “Absolutely not!” As the article goes on to say, “Market crashes are nauseating, especially if you are young and have not experienced one. They are frightening. And no one can say for sure when the market will stabilize. But time is in your favor. You have years — decades! — to recover from this roller coaster ride and reap returns when the market rises again. Even if you are in your 50s or even your 60s, you are likely to spend 20 or even 30 years in retirement. So you have time to let your money bake longer in the investing oven.”

Stay The Course

The New York Times suggestion is one with which I agree. Even though the stock market is taking nose dives and gyrating wildly. Correction will come. And, if you are young, even in your 50s and 60s, you’ll see the market come back. Of course, we never know if it will come back to the most recent high, however, historically it has exceeded previous highs.

Keep in mind also that the professionals in charge of your 401k investments are being able to buy stocks at sale prices now. So when the market does come back, the regular contributions you continue to make are buying more shares at bargain basement prices.

And, even better news, if you have an employer that matches your retirement plan contributions, you’re getting even more shares of stocks. If you’re not saving enough to get the match, and if you can do it, increase your paycheck contribution now


In all of life, patience is a virtue. In times like these, patience is a prerequisite. We will get through this historic time.

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