Stay the course in retirement planning

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This article was published 11/02/2021 (1882 days ago), so information in it may no longer be current.

The COVID-19 pandemic has caused huge changes in many aspects of life, but less so in retirement planning, according to one financial planner.

The pandemic resulted in an initial downturn in the stock market, but that quickly recovered over the summer, said Kerry Auriat, an investment advisor at National Bank Financial. As a result, many people’s finances are still in-tact.

“For many of my clients, they enjoyed very positive years,” he said.

“There’s a real recognition that there’s a pandemic happening out there, on the other side there’s also a recognition that the pandemic does not necessarily equal finances.”

Many retirees are already out of the workforce, so they aren’t at risk of losing their jobs. While they may have seen big changes in their day-to-day lives because of the health restrictions, their pensions aren’t as at risk, he said.

“It’s been an impact on the quality of life, but I’m not seeing it from a financial planning perspective,” Auriat said.

The Bank of Montreal’s annual retirement survey found similar results. According to BMO, 57 per cent of Canadians surveyed living in the prairies are confident they will have enough money to retire on time, compared to 54 per cent nationally.

A total of 64 per cent of people in the prairies also planned on making a contribution to their Registered Retirement Savings Plan before the March 1 deadline, according to the BMO survey. That number is just below the 67 per cent of people in Ontario and British Colombia who intended to make a contribution, the highest in the country.

The financial impact of the pandemic is also highly dependent on what kind of industry people are working in. Depending on the nature of the business, some people on the cusp of retirement are pushing it back by a year or two.

For those in the service industry, such as a barbershop or a restaurant, Auriat said the pandemic hit them hard.

“Manitoba Hydro kept charging you and property taxes are still due… and so it has pushed off their ability to retire,” he said.

On the other hand, many people in agriculture had a more prosperous 2020 because of a producing growing season.

“If you’re a person who runs a business that’s considered essential it may well have been a good year,” he said.

Devron Jakeman, a wealth advisor at Fusion Credit Union, said the pandemic wasn’t something anyone could see coming, but a strong plan is still key before retiring. He also said the impact of the pandemic on retirement is highly dependent on whether people are working, or if they are already retired.

The pandemic-induced volatility of the market may have caused added emotional stress for people over the past year, but a long-term vision is key, he said.

“If you’re buying long-term and you’re in your earning years… have a long-term perspective on it, don’t get too short-sighted on what’s going to happen in the next three to six months or the next twelve months if that money is intended for longterm savings,” he said.

“Really stay the course on planning, especially if you’re earning hasn’t been affected. It’s easy to get distracted with COVID but make sure to keep following your plan.” 

» dmay@brandonsun.com

» Twitter: @DrewMay_