COVID-19: Your Retirement Savings

As health experts continue to fight the spread of the COVID-19 pandemic, so many Americans are facing their own uphill battle: finances. With millions out of work across the United States and the bottom lines of companies changed in a matter of months, the I-Team dug into what this means for retirement funds.

“The 401(k) impact is going to depend on the long run recovery with the economy,” said Jon Fulkerson, assistant professor of finance at the University of Dayton.

Fulkerson said he is closely watching market trends for signs of what type of economic recovery may be around the corner, after months with the U.S. economy largely shut down. His big question: will our recovery be “V-shaped” or “U-shaped?”

“V-shaped means short term economic regress then recover back to the way it was. U shaped it takes little longer, goes up a little slower to get back to where we are,” Fulkerson said.

One reason that matters is the impact it could have on retirement funds for so many Americans. Several financial advisors have told News Center 7 they have gotten called from concerned clients in recent months.

Sigma Investment Counselors CEO Robert Bilkie is preaching a mantra of patients to those eying the markets and their 401(k): “Don’t make an emotional decision.”

Bilkie says, by and large, he would not recommend people make major changes to their 401(k) allocations, but added some adjustments might be prudent.

“It may be appropriate to make some near turn adjustments if you had too much in equity – maybe you take a little bit out and put more of that in fixed income,” he said.

Bilkie said the best thing those farther from retirement to do is to continue investing regularly.

For those closer to retirement, he said, “I would not be thinking about being more aggressive here,” adding, “I think you’ve got to just ride it out. There’s a lot of uncertainties.”

And while the markets will have an impact on retirement funds and the economy, there is another component of the current situation: those trying to get by without tapping into what they have saved for years down the road.

So many businesses in the region are struggling right now. The Miami Valley Restaurant Association told the I-Team it does not have a concrete number, but is certain at least 60 percent of staff at its member restaurants were furloughed or laid off.

Coco’s Bistro in Dayton estimates it lost 90 percent of its business, laying off the vast majority of its workers.

It makes for uncertain times for both the former employees, and owner Karen Gagnet.

“The hit is substantial. Financially, emotionally, it is,” Gagnet told the I-Team.

While the restaurant is getting by, Gagnet wonders what the future looks like, even as businesses get the green light from Governor Mike DeWine, (R) Ohio, to re-open.

“I think realistically people are going to come back but I think that business it will be gradual – and I don’t know that we’ll ever see things the way they used to be for a very long time,” she said.

Bilkie is taking an optimistic view. He said, despite the inevitable changes, “People are going to continue to have their cup of coffee.” He also believes the innovation COVID-19 has forced on companies in the form of improvisation, may benefit them in the long run.

“I think you’re going to find in ten years we look back and say that was a turning point, and it was also a catalyst for a better society,” he said.

It’s the same hope getting Gagnet through this turbulent time. She told the I-Team, while she feels the business community will “feel the impacts of this forever,” she hopes her family, her restaurant and its workers are stronger because of the experience.

“While it’s been sad, and you know has had a big impact, there’s some really beautiful things that can come from it as well. So I’m going to try to remember those things,” she said.

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