By Gary Reese
Faith Investments, Blufton
419-358-4207
Our world has been turned upside down by COVID-19.
For the most part, we have never walked this road before – personally or as communities. Many are facing loss of work, depletion of savings, delays in unemployment or other assistance, and so forth. Others have had relatively few economic adjustments, but they are facing family, health, or interpersonal difficulties. Times are hard all around.
Here is some guidance, decade by decade, for how you can adjust or compensate for the economic impact. These are general statements and may not apply specifically to the decade stated – just some general observations:
IN YOUR 20’s:
In your 20’s, slow times are a great time to invest in yourself. Do some online learning, work on an extreme fitness goal, build your resume through volunteering or “outside the box” projects.
If you were in a “gig job” or self-employed status, the Pandemic Unemployment Assistance (PUA) is now available in Ohio. pua.unemployment.ohio.gov is the starting point. Prior to COVID, unemployment benefits were exclusively for those employed in traditional W-2 employment, but PUA expands that to 1099 workers and “gig job” workers.
Student loans that are federally administrated have an automatic deferral. If you can and want to pay your payments, it will obviously continue to pay down your debt. However, if your income has been reduced, you do have the option of not paying. PLEASE examine your situation carefully and work with your lender to be sure that your loans qualify for this deferral.
IN YOUR 30’s:
Any of the above may apply and…
Debt management is pretty important in this decade. If your income has been significantly reduced, look for temporary relief if necessary on your mortgage, credit cards, etc. Move toward creditors and ask if they have any assistance rather than just suspending payments.
It is important to figure out what is necessary. If anything is causing you to spend more than you earn/have, cut it – reduce it – sell it. Accumulating debt right now will make personal recovery much more difficult.
If you happen to have surplus money, build your emergency fund. It gives peace of mind and creates margin if your situation worsens.
IN YOUR 40’s:
Any of the above may apply and…
Get a financial review. It doesn’t have to be “pretty” (!) just do it.
Protect your health. You are bridging the generations of children and aging parents. Take care of yourself and invest in yourself and your health.
Although we do not advise it and there are number of reasons to caution against it, there is also the possibility of borrowing from your 401k for a time because of COVID hardship. You should seek advice about doing that and look at other options first, generally speaking.
IN YOUR 50’s:
Any of the above may apply and…
This is a great time for a retirement planning review. You still have time at this point to adapt and recover from economic downturns, but it may be wise to get advice on how to do that.
This is also the time for a conversation about long-term care. Many people are concerned about the need to go on Medicaid later in life. Long-term care policies can be a way to avoid depleting your assets and being required to use Medicaid as your ‘last option’ for health care. It is possible to protect your assets and have good quality care – if you plan ahead.
IN YOUR 60’s:
Any of the above may apply and…
Estate planning comes into focus in this decade. We all know that we cannot live forever, but we’ve worked hard for our assets. We want to have some input into what happens with them after we die. Now is the time to be sure that your wishes are written out. Peace of mind for you and a much easier transfer for your heirs.
IN YOUR 70’s and beyond:
Any of the above may apply and…
The CARE Act was passed to provide strategic economic relief because of COVID. One of the features was to suspend the need to take your 2020 required minimum distribution (RMD.) In some cases, the need to take the 2019 RMD was also suspended. We can help you know your options and it may be advisable to consult with your tax adviser. Especially if you are invested in the market, there may be advantage to leaving the funds in your account this year so that they can participate in any recovery the market makes.
IN ANY DECADE:
Give us a call at (419) 358-4207 for a free, no-obligation conversation. We offer a no-pressure environment to ask questions, learn your options, and get answers. We only work with those who want to work with us and you are always in the driver’s seat as far as your relationship with us. If you want education and insight more than you want to be sold something, we’d be happy to talk with you.
