That is how one can get your retirement financial savings going once more after 2020
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The COVID-19 pandemic made 2020 a difficult year for many reasons, including retirement planning. Whether you’re a baby boomer about to retire or a millennial working to save for the future, you won’t be alone if you were forced to deviate from course last year.
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Prior to the pandemic, 6 in 10 Americans said they were on the right track with their retirement plans, according to TD Ameritrade. However, that number has fallen to just 4 out of 10.
Fortunately, there are many ways to recover from a less than ideal situation that has torn your retirement savings. This may mean making even more sacrifices or creating a different plan than you originally intended, but you can.
Here’s a look at 10 common scenarios people faced with their retirement plans in 2020, as well as advice on how to turn things for the better. Read on to learn how you can make the significant changes that will give you the financial security you deserve in your golden years.
Last updated: May 7, 2021
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You borrowed money from your 401 (k)
As a result of the pandemic, 29% of people have either taken out or are considering borrowing against their retirement savings, according to TD Ameritrade. If you have taken this step, you must repay the money plus interest within five years of the disbursement.
Look for ways to cut your budget in order to get the money back in your account asap. For example, you could get a second job, cut your grocery budget – eat more pasta – get rid of cords, or put in place a 24-hour rule for all online purchases.
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You have lost your part-time seasonal job
Before the pandemic, you had a second job to save up for retirement. Unfortunately, you have been laid off and now you are without that source of income.
This is undoubtedly disappointing, but there are other ways you can get extra cash to fund your retirement account. Now, if you’d prefer to work from home, many companies offer remote part-time jobs. For example, you could be a contract tracer, customer service representative, online tutor, transcriptor, or even a home fashion stylist. Use job sites like Indeed.com and ZipRecruiter to find open positions.
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If you’re not interested in another second job, keep track of your expenses to look for ways you can save – that is, stop buying coffee – so you have extra cash to spend.
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You have used up your emergency fund
Due to the pandemic, 38% of people have either withdrawn or are considering withdrawing money from their emergency fund / savings account, according to TD Ameritrade. If you had to do this to pay the bills, don’t panic as there are many ways to rebuild your savings.
If there’s another stimulus check up – and you’re in a better place financially – you should put it straight into your emergency fund. You can also get a side gig and / or reduce your budget to the bare minimum in order to get the money back.
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You stopped contributing to your 401 (k)
If you’ve had to unsubscribe from 401 (k) posts this year, you’re not alone. However, you want to keep this pause as short as possible so you don’t fall too far behind.
Undoubtedly, before taking a break on your 401 (k) posts, you have likely stretched your budget as much as possible. If there is no end in sight, it may be time to look for a new job with a higher salary. Despite record unemployment in 2020, many companies are successful and able to offer a competitive package of salaries and benefits.
Also note: if you are 50 or over by the end of the calendar year, you can make a catch-up contribution of up to $ 6,500.
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Your employer has reduced or eliminated its 401 (k) match
Several large companies, including Choice Hotels, Best Buy, and Marriott Vacations, have suspended their 401 (k) -match programs for employees because of the pandemic. If your employer takes this step, it will affect your monthly savings goals.
Whenever possible, try to increase your contribution to make up for the loss. Either way, be sure to ask questions to find out when the company is looking to bring this benefit back. Ultimately, if the company still doesn’t reintroduce the program when things return to normal, it may ultimately make sense to look for a new job.
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You were supposed to retire but didn’t
When 2020 started you thought you’d start your final year in the workforce. However, the pandemic has forced you to rethink your plans because you are nervous about losing your steady paycheck and employer-sponsored health care.
According to Voya Financial, Inc., more than half (55%) of employed Americans plan to retire due to the COVID-19 pandemic. When you are able and feel more comfortable working part time retirement might be a good idea. Talk to your employer and see if you can find anything that is mutually beneficial.
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Your 401 (k) scored a hit
This year has been a wild ride for the stock market. If your 401 (k) didn’t do that well, it’s easy to panic.
Before you change your asset allocation, however, you should speak to a financial planner. In fact, your 401 (k) provider may have experts to assist you with your portfolio. They can help you decide whether to reassign or just be patient and wait for things to return to normal.
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You have provided financial support to family members
The pandemic has left millions of Americans in financial trouble. When your loved ones are in trouble, it is only natural to want to help in any way possible. However, if this is affecting your retirement assets in any way, then you need to set limits.
For example, if an adult child has moved back in with you, ask them to pay the rent. That way, you can offset the cost of having more people under your roof and get back on your feet at the same time.
See: Essential Money Tips For Surviving The ‘Pandemic Spiral’
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They had to cut their wages
Almost a third (30%) of employers introduced wage cuts due to a pandemic. This was found in a survey by executive and business coaching firm Challenger, Gray & Christmas, Inc. Of these, 55% were taking these steps to avoid layoffs.
If you’re in this position, you may not have enough extra cash to continue contributing to your 401 (k) – at least at the same level. Try to find extra space in your budget so that you can save at least some in the meantime.
There may not be much else you can do right now. If after a while there is still no end to your wage cut, you should seek employment with a company that is not dealing with the pandemic.
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They felt compelled to take out social security sooner than expected
Technically, you are of retirement age but wanted to work for a few more years. You wanted to wait until you started getting social security benefits because the longer you persevere, the longer the monthly payment increases.
Unfortunately, your employer was struggling financially due to the pandemic that led you into early retirement. You’re now getting smaller monthly social security checks than expected, which has thrown your plan off.
Consider adding a part-time job to your income. That way, you can enjoy financial stability so that you don’t have to make uncomfortable sacrifices.
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This article originally appeared on GOBankingRates.com: How to get your retirement savings going after 2020