5 Ways to Protect Your Retirement Funds During the COVID-19 Pandemic

August 01, 2019

The coronavirus (COVID-19) pandemic has affected everything in our daily lives, including our finances and expectations for the future.

Below, we share some advice to help you feel less worried about market volatility and manage your retirement funds, taking into account the issues we are facing worldwide:

  1. Be patient with the investments in your retirement plan. Volatility is part of investing. The loss will not be realized until you sell your investment. Therefore, your strategy should be long-term, as long as you can and according to your life stage.
  2. Review when you will need your retirement funds and how you will use the funds. If you are far from retirement, you could benefit from maintaining your current investment strategy. Depending on your risk tolerance, this could mean a more aggressive strategy. In this video, Carlos López Pierluisi, a retirement specialist in Popular’s Wealth Management division, explains that retirement plans have several instruments to help us gain exposure to the stock market, such as:
  • Mutual funds
  • Money market fund
  • Bonuses
  • Stocks
  • Balanced mutual funds

You can review your 401K plan by accessing your profile at www.popular.com/401K or contact one of our financial experts to check if your current investments match your profile. If you have any questions or need additional assistance, you may also contact us at educacionretiro@popular.com.

  1. Avoid withdrawing money from your retirement plan funds. Withdrawing money from your retirement plan fund during market downturns could prevent the likelihood that the value will be recovered. Besides, you would be withdrawing money that may generate future profits, dividends and interest, thus limiting the amount you will have available by the time you retire. As long as you can, exhaust other options, such as federal government reliefs, emergency funds, or other bonds or royalties. This will help you have a strong fund when you retire. Watch this educational video from our retirement specialist about time and risk tolerance in a retirement plan.
  1. Maintain or consider increasing your contribution to your retirement plan, if your budget allows it. Over the last few weeks, the stock market has suffered a downturn, which means you could seize future investment opportunities.
  2. Weigh your emergency fund. Do you have an emergency fund for unexpected events, such as car repairs, medical expenses? Now more than ever, having an emergency fund should be a priority. Setting aside and saving money for unforeseen events may help you overcome any negative impact on your finances and avoid withdrawing money from accounts that have been designated for your retirement. This short video will explain how to create an emergency fund.

For more advice on financial management, visit https://www.popular.com/en/services/financial-planning/ or https://blog.popular.com/en/category/your-money.

The information and general descriptions found in this article are designed to help you understand some of the factors you should generally consider when evaluating the appropriateness of any strategy or investment in your retirement plan. All descriptions included are solely for informative and educational purposes for your own independent consideration. This information is not to be considered as counseling or suggestions to take (or refrain from taking) any particular action. By providing this information, we assume you are able to assess the general information and descriptions contained herein to apply your own judgment.  This document was prepared for informative purposes only and should not be construed as advice of any kind. Banco Popular de Puerto Rico, its subsidiaries and/or affiliates do not provide legal, accounting or tax consultancy services. If legal, accounting, or tax consultancy services are required, you should seek the services of a competent professional. Investment products are not insured by the FDIC, are not deposits or liabilities, are not guaranteed by Banco Popular, its subsidiaries or affiliates, and may lose value. Insurance products are not insured by the FDIC or any other federal government agencies, are not deposits or liabilities, and are not guaranteed by Banco Popular, its subsidiaries or affiliates. Some insurance products may lose value.