The current COVID-19 crisis and its consequential economic and market impact represent the first serious challenge to the new generation of investors in retirement who have embarked on drawdown. Incorrect investment decisions taken now could mean retirees leading poorer and less fulfilling lives as they move through the retirement years. However, if investors refocus on their retirement objectives and maintain a long-term approach, it should be possible to navigate the current difficulties without substantial long-term damage.
One of the most important considerations for investing in retirement is that individuals are different, each with unique financial needs, different sources and amounts of retirement income and completely personal ambitions for their future in retirement. Any list of potential actions to help refocus investors on retirement needs to bear this in mind. Nevertheless, the following ideas may be worth considering in the light of investors’ own circumstances:
5 tips to help investors “refocus on retirement”
1. Keep a long-term perspective: For all investors, keep your long-term investment objectives at the forefront of your mind and align your actions with them. However, it is important to realise that any dramatic changes to your investment stance in the current environment are likely to be costly; instead, you might consider doing things gradually or waiting for more stability. Market liquidity can be poor in the current environment, which makes transactions potentially more expensive. It is also easy to become overinfluenced by market sentiment, which makes decision-making with long-term consequences particularly difficult at times like this.