(KTXL) — It may have been that swing, that dip or that trip overseas that workers on the verge of retirement were setting their sights on.
But with most 401(k) plans taking at least a 10% hit within the last month, certified financial planner Kimberly Foss says some retirement plans may have to be delayed.
“The key here is don’t panic,” said Foss, the founder and president of Empyrion Wealth Management. “Don’t rack up the debt in the next couple of months.”
Foss says while finances in the time of COVID-19 may seem unsteady, she advises managing what you can control now.
“That’s the one thing we all can do, is look at our budget, look at our needs and wants. See if we can cut the debt down,” she said. “Evaluate. Where are you in your life cycle and be able to look at your portfolio and say, ‘Hey, I might have to wait a couple of years more now to retire because I am down $100,000.’”
She stresses even if you’re in a financial pinch, to avoid borrowing from your 401(k).
“Look at maybe a HELOC loan or a line of credit on your home. Don’t use those credit cards, they’re really expensive, even though rates have come down,” Foss said.
And whatever you do, don’t obsess, says Benjamin Carlston, assistant professor of finance at the University of the Pacific.
“It’s more like a rotisserie. You kinda set it, you forget it and then you check on it in a little bit, but you don’t want to be looking at it every day,” Carlston said.
He says that with this sudden financial rollercoaster, it’s best to be patient, calm and seek help from a certified financial advisor.
“Or someone else to be able to bounce your ideas off of and kind of talk you off that cliff of potentially making an impulse decision that might not benefit you over the next 20, 30 years,” he said.
Foss and Carlton say it’s only a matter of time before the markets steady. As for when that will be, only time will tell.
“Patience, faith, reward,” Foss said. “That’s what I always say.”
Foss also advises that if you need further financial guidance, look for a certified financial planner and ask how they’re paid — whether it’s through commission or assets under management. A good resource is cfp.net.