Dan Dobry

Planning Retirement Post Covid-19 – Time to Rethink Your Strategy

While the long-term effects of COVID-19 pale in comparison with the immediate loss of human life, we need to consider the effects of the disease on our futures, particularly our plans for retirement. The pandemic has wrought many changes (not all of them bad) and accelerated other existing factors.

For Example, You May Have:

Enjoyed being at home and are now considering retiring, but don’t know whether you have put enough aside to fund your retirement.

Decided you need to keep working for longer because the crisis has reduced your pension pot.

Recognized that working from home, or flexible hours, could offer a way to stay on at work without the stress of commuting.

Realized you don’t know how the pandemic has affected your savings and that you now need help to understand what you can expect in retirement.

Are worried about the inflated values of the stock market and the possibility of a crisis on the horizon that could affect your ability to retire. 

How Has the Pandemic Changed the Face of Retirement Planning?

The concept of ‘retirement’ has changed. The idea that we stop working at 65 and then spend our time playing golf and walking hand in hand on beaches is now outdated and probably not realistic.

The nature of work has also been evolving over the last 50 years but since lockdown began, many of those ongoing developments have been fast-tracked for immediate use. 

Particularly the way people work or move from one mode of work to another.

Should We Retire the Word Retirement? 

As our lives have been getting longer and healthier – compared to prior generations – academics globally are advocating doing away with the concept of retirement altogether. In support of that idea, increasing numbers of workers report in surveys that they expect never to retire, and not just because they can’t afford to but often because they like the idea of continuing to work.

The problem is, as our lifespans continue to be extended, we can’t just keep adding the extra years to the retirement phase of life. It just takes too much money to be retired for 25 years or more, which can easily happen if you retire in your early to mid-60s. Also, many unforeseen and challenging events can happen in the economy or your life that can derail the careful retirement plans you might have made. 

While I celebrate people who are trying to break stereotypes, I respectfully disagree with those who advocate eliminating the concept of retirement altogether. In my perspective retirement has changed and we now live in a world where we will change the way we work and live our golden years while continuing to be creative and part of the economy. 

The Importance of Planning 

Planning is the process of meeting your life goals through the proper management of your finances. Life goals can include creating passive income as an alternative to needing to work, living a life you enjoy, and transferring assets from generation to generation for example. 

The academic financial planning process consists of 6 steps that help you take a holistic approach to assess where you are financial. Using these steps, you can work out where you are now, what you may need in the future and what you must do to reach your goals. 

The process involves gathering relevant financial information, setting life goals, examining your current financial status, and coming up with a strategy or plan for how you can meet your goals given your current situation and future plans. 

Financial planning provides direction and meaning to your financial decisions. It allows you to understand how each financial decision you make affects other areas of your finances. For example, buying a particular investment product might help you pay off your mortgage faster or it might delay your retirement significantly. By viewing each financial decision as part of a whole, you can consider its short and long-term effects on your life goals. You can also adapt more easily to life changes and feel more secure that your goals are on track. 

The financial planning process consists of the following steps: 

  1. Gather client data, define goals.

You should define your personal and financial goals, understand your time frame for results and understand the implications of exposure to risk. 

  1. Analyze and evaluate your financial status.

At this stage, your planner should analyze your information to assess your current situation and determine what you must do to meet your goals. This could include analyzing your assets, liabilities and cash flow, investments, or tax strategies. 

  1. Develop and present financial planning recommendations and/or alternatives.

The financial planner should offer financial planning recommendations that address your goals, based on the information you provide. The planner should go over the recommendations with you to help you understand them so that you can make informed decisions. The planner should also listen to your concerns and revise the recommendations as appropriate. 

  1. Implement the financial planning recommendations.

You and the financial planner should agree on how the recommendations will be carried out. The planner may carry out the recommendations or serve as your coach, coordinating the process with you and other professionals such as attorneys, accountants, or stockbrokers. 

About the Author
Dan Dobry was the founder and a director of the GlobalNET Investment House, he was one of the founders of the Union of Financial Planners in Israel (UFPI) and served as the first Chairman and President of UFPI. Dan was the Global Council Representative for Israel for the Global Community (FPSB) from 2012 - 2018 and was a member of the Committee for Standards and Qualifications for the European Union (SQC) until December 2021.
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