Rethinking retirement? Here are some ideas to handle your investments

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For many Americans, a top resolution every new year is a simple goal: save more money.

Achieving that in 2021, however, may not be so simple. For many, it will be much more difficult and may have to be done a bit differently, especially when it comes to saving for retirement.

In fact, nearly four out of 10 people said they will be in “survival mode” in 2021, focusing on dealing with day-to-day money matters, according to a survey by Fidelity, the nation’s largest 401(k) provider.

After all, many working adults faced a financial setback in 2020, whether it was a job loss, unexpected expenses, giving financial assistance to family and friends or dealing with a health emergency, the survey found.

As a result, many people dipped into the largest chunk of money they have — their workplace retirement savings accounts.
Nearly 60% of Americans withdrew or borrowed money from an IRA or 401(k) during the pandemic, and nearly 66% used those retirement savings to cover basic living expenses, according to a Kiplinger/Personal Capital survey of 744 people ages 40 to 74 with at least $50,000 in retirement savings.

Bill Saylor, a partner at Barnard Vogler & Co., a CPA firm in Reno, said pulling out retirement funds is a common overreaction during economic downturns.

“Pulling out retirement funds that you don’t need right now is a big mistake,” Saylor said. “Some people pulled out funds because they were uncertain or maybe were getting a little ‘tinfoil-hat-worried’ about what was going to happen.”

To that end, Saylor said another trend brought on by the pandemic is some people have stopped contributing to their retirement plan or their outside IRA during the pandemic.

“And that’s a bad thing to do,” he explained. “Hoarding those funds for what might happen is always a bad idea because when those funds are in there, they’re better able to grow for you; they’re better able to provide for you longer term.

“Yeah, there was a bunch of volatility in the market but, really, the market has come back very strongly,” he continued. “Plus, I would always point out to colleagues and clients of mine, no matter what, the market’s still going to outperform putting it under your mattress or a shoebox somewhere.”

Zach Boyd, a tax manager at Eide Bailly in Reno, agrees.

“If you’re financing your retirement, make sure that you’re putting your money away because the market returns are pretty good,” Boyd said. “There’s really nowhere else to put your money — with interest rates being low, bonds don’t make sense. You might as well throw it in stocks. That’s the thing, there’s always money pumped into the economy, so there’s always a lot of cash floating out there right now.”

Some people may be tempted to “get rich quick” and jump into day trading due to the volatility in the stock market. Boyd suggests resisting the urge to sell.

“It’s making sure that you’re disciplined with your plan, and making sure that you don’t panic and sell,” he said. “I would advise to not be too aggressive and not think you’re a professional trader.”

Boyd said that some older workers and near-retirees that stayed with their stock portfolio possibly had their retirement plans accelerated by the pandemic.

Others, Saylor said, may retire early because of the unique health barriers posed by the coronavirus.

“They’re going to look at it and say, this is enough, I’ve worked 40 years and I don’t need to work another couple years under whatever the new normal looks like,” he said. “There’s some people who may come out of the labor market and retire early.”

In the third quarter of 2020, about 28.6 million Baby Boomers — those born between 1946 and 1964 — reported that they were out of the labor force due to retirement, according to the Pew Research Center.

That equated to 3.2 million more Boomers than the 25.4 million who were retired in the same quarter of 2019. Until last year, the overall number of retired Boomers had been growing annually by about 2 million on average since 2011.

Notably, the job losses associated with the COVID recession may be contributing to the jump in Boomer retirements, the Pew Research Center reported. In other words, some have been forced into retirement.

As such, some older workers that are still employed may decide to delay their retirement, Saylor said.

Though stocks continue to perform well, lower bond yields caused by the pandemic might make it harder to make ends meet on a fixed income, he noted.

“Folks who are uncertain are going to work longer,” he said. “When your income is most likely going to be fixed, if you’re retired, and you’re going to have significant additional expenses that you can’t necessarily deal with — notably, medical expenses, which go up after we retire as we get older. And those sorts of things are outside of our control.”

28.6 million: Number of Baby Boomers reported as retired in 2020 Q3
25.4 million: Number of retirees in the same quarter in 2019
3.2 million: YOY increase — a 12.6 percent increase
Source: Pew Research Center

Read more in Peak NV
This article is adapted from the Spring-Summer 2021 edition of Peak NV, a specialty biannual magazine produced by the Nevada Appeal that was inserted in the April 3 Nevada Appeal. Go to to read a digital version of the magazine.


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