Financial Views Newsletter – January 2022
With a surge in cases due to the Omicron variant, the COVID-19 pandemic is changing. The following insights may help protect your plan in response.
Bolster your emergency fund
If you, like many Americans, tapped into emergency funds throughout the course of the pandemic, it’s time to consider replenishing it, no matter your age. Working towards a cache of three-six months of living expenses in a liquid account is a good place to start. For those nearing retirement, work with your advisor to consider any adjustments needed to your allocation. Doing so can help your portfolio weather market changes.
Review your asset allocation
It’s no secret that the pandemic has prompted market volatility. For those investors who can accept volatility, stocks may still offer opportunities for growth, as the Dow continues its steady climb: 5, 500 points higher in Dec. 2021 than Nov. 2020. For investors seeking to preserve their savings, ensure that assets are allocated optimally, or consider switching to a more conservative portfolio.1
Protect your retirement savings
If you are still working, keep contributing to your retirement savings, even if your employer has suspended their match. If you are not working, try to protect your retirement savings as long as possible by emptying other funds first. Be diligent about maintaining health coverage to avoid large medical bills. And when you do start working again, make up for lost time by saving a bit more and/or working a bit longer. If you are retired, make smart, budget-informed spending decisions.
Stay positive and be proactive
In a recent study of American investors, 82% of respondents reported that the pandemic had some level of impact on their financial plans. However, an equal number of respondents (also 82%) reported confidence in their ability to meet their financial goals.1 Talk with your advisor about how pandemic-related changes to your employment or retirement timeline might impact your plan.
Staying Prepared
Planning for healthcare expenses–a significant expense in retirement–is essential. Make the most of your time to prepare by working with your advisor to estimate and plan for your future healthcare expenses. Your retirement timeline, when you plan to collect Social Security, and how you will generate cash flow in retirement will all impact your healthcare savings. Get an early start on understanding your coverage options, including Medicare. And consider increasing contributions to tax-advantaged accounts, especially HSAs, which allow tax-free spending on healthcare in retirement.2
Wintering in the Twin Cities
Sticking close to home this winter? Explore the Twin Cities through fantastic food, outdoor adventures, and safe cultural experiences.
Top 5 Eateries For Tonight’s Take-Out 3
1. Spoon and Stable
2. Meritage
3. Young Joni
4. Handsome Hog
5. Bar La Grassa
Explore A Local Ice Castle 4
Located in five cities across North America, including Minneapolis, Ice Castle attractions are built by professional ice artists, and feature breathtaking LED-lit sculptures, frozen thrones, ice-carved tunnels, slides, and fountains.
Take In a Cultural Experience
When cabin fever strikes, consider supporting one of the Twin Cities’ 55 museums. Museums offer many virtual options for exploring art, science, and history.
1 The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries and widely held by individuals and institutional investors. It is unmanaged and cannot be invested into directly. Past performance is no guarantee of future results. Asset allocation does not guarantee profit or protect against loss.
3 https://www.investopedia.com/retirement/how-plan-medical-expenses-retirement/
4 https://mspmag.com/eat-and-drink/readers-picks-for-best-restaurants-2021/
