The pandemic affected working professionals in more than one way. The challenges of working from home were daunting, and pay cuts made life even harder. Millions of Americans even lost their jobs amid the initial lockdowns. Retirement savings contributions took a blow as professionals had to put them on a back seat. The worst seems to be over, so it is time to get back with your plans in the new normal. After all, you cannot risk your long-term financial goals with a prolonged hold on retirement savings. But you have to make a clever comeback strategy to get them back on track amid the ongoing crisis. Here is the best retirement planning advice you can follow in the new normal.
Restart saving as soon as possible
Your retirement savings may have suffered amid the pandemic, but the worst you can do is not restart. Pick it back as soon as possible, even if still grappling with reduced income. Every dollar counts, so even a small start can take you a long way. Getting your momentum back can be challenging, but you can save a bit more by cutting short on expenses and resetting your monthly budgets.
Look for a side hustle to supplement savings
Besides reducing your expenses, you can boost your income to contribute more to retirement savings. The good thing is that the side hustle trend gained pace in COVID times, so there are plenty of ideas to explore. You can take some freelancing projects on the weekends or even try working part-time at a local store. Creating an alternative stream can get your finances on track and even open a long-term income prospect you can leverage post-retirement.
Investing should be an integral part of your retirement planning strategy because it makes your money grow. Besides traditional IRAs, pick self-directed IRAs to step up your investment plan in the new normal. But make sure you know the self-directed IRA rules before diving in. Look for high-yield yet low-risk options to maximize your wealth within a short timespan. The key to a comfortable retirement is growing your money enough to provide a financial cushion.
Open a health savings account
A health savings account (HSA) can be of great help in supercharging retirement savings efforts. It allows you to set aside funds to pay for qualified medical expenses, making it a relevant option in the pandemic. You have the choice to invest the HSA money in stocks and mutual funds to facilitate their growth. The best part is that you get a tax advantage with an HSA.
Pay down debt
Being debt-free at retirement should be a financial goal for everyone. Clearing car and mortgage loans, credit card debts, and student loans should be on your wishlist. The last thing you will want to do in your non-earning years is to owe money and pay interest. Start small whenever you can, and clear your debts. Eliminate the ones with the highest interest rates first because they are the most stressful.
Whether retirement is just around the corner or you have several years to go, consider reworking your plans this year. The situation is not the same as pre-pandemic times, so it makes sense to refresh your savings and investments with these strategies.