Retirement Investing in the Covid-19 Era: Four Takeaways

Outlook on economic growth
Covid-19 is still with us, but its financial ravages appear to be waning. According to McKinsey’s latest poll (July 2021) of global executives, “views on the global economy have tempered, but expectations remain largely positive.” Specifically, though down from 81% in June, 71% of executives in the monthly polling of global executives are still optimistic about economic matters going forward.

Nonetheless, investors, especially soon-to-be retirees, need to take a closer look at likely near-term economic conditions. With this in mind, Advisors Magazine polled a handful of advisors from our stable of contributors. Some of their conclusions are as follows.

1. There will be opportunities…

Kim Dyer, co-founder of Glendale, AZ-based Keystone Capital Management Group, LLC, is a skilled personal financial planner and business advisor, certified not only in exit planning for executives (CEPA) but also as an Enrolled Agent with the IRS.

According to Dyer, “the increased stimulus spending will put pressure on Congress to increase taxes, which will have an impact on business. It will also impact the interest rates and continue making it tough on fixed income investments. But there are still profitable places to invest and still money to be made being in the market.”

KimDyer 1Dyer says there were important investments lessons to be learned within the context of the pandemic. The key lesson “is not making decisions based on emotions,” she said. “When the pandemic started many people reacted with fear and moved their money to fixed income investments. Those individuals with investments on the sidelines missed a huge opportunity in 2020.”

“The other lesson,” continues Dyer, “is to stay well diversified. Customized and well diversified portfolios are always important, rather than making changes based on emotions or a reaction. We believe in helping our clients understand their financial needs, so we can match those with the appropriate investments.“

2. …but investors should be realistic.

Joel Guth, CEO and Founder at Columbus, OH-based Gryphon Financial Partners is also optimistic about the marketplace, but emphasizes that conditions have definitely changed.

Joel 007“During the crisis, the economy received unprecedented amounts of fiscal and monetary stimulus, which helped limit the economic impact of the pandemic and boosted asset prices which led to elevated valuations,” says Guth. “But as we look forward, we believe the accommodative monetary and fiscal policies are going to slow, and we will also experience changes to the U.S. tax code.”

Overall, say Guth, investors should be prepared for growth – but at a slower pace than what has been experienced over the past four to five years.

In particular, “We believe these factors combined, along with elevated valuations, could lead to meaningfully lower traditional market returns over the next 5 to 10 years,” he said.

3. Expect moderate – not severe – inflation…

So the news in markets at-large isn’t losses or no growth – it’s slower growth, which is not bad news. As for the news on inflation? According to Mark Wilson, APA, CFP® and president at Irvine, CA-based MILE Wealth Management LLC, again, the news isn’t all that bad.

Markwilson“Baby boomers, today’s retirees and near-retirees, may have experienced inflation before,” says Wilson. “But their memories are short and their financial situation was far different in the 1970s.” What inflation means today, continues Wilson, “is that retirees and near-retirees face higher prices and loss of purchasing power from their bonds/cash and so they have the most to lose if we see sustained inflation.” But not to worry, says Wilson. “While I believe we’ll see in inflation about the numbers we’ve enjoyed the last 15 years, I’m not in the ‘rampant inflation’ camp.”

Though even limited inflation will have at least some impact on those already retired or soon to be retiring, Wilson sees little inflation-related worries for other age groups.

“Though for younger folks who have not seen/felt the impact of inflation, any sustained inflation will be a wakeup call,” says Wilson. “But, I’m less concerned about how inflation will impact the millennial/Gen-Z group as these groups will benefit from higher wages and higher equity prices. That is, inflation tends to benefit wages and stock markets.”

Daniel ReyRegardless of one’s wealth planning stage, and regardless of the levels of inflation, president and wealth manager at Voyage Retirement Solutions Daniel Rey in Altamonte Springs, FL says “people tend to factor in taxes and fees in portfolios, but inflation often times gets overlooked.” Rey believes it is vital that people “invest wisely, and cautiously and increase their knowledge base.” Which includes, say Rey, understanding that “the real rate of return is growth minus taxes, fees and inflation.”

4. …but never forget about the need to establish a firm base of retirement cashflow.

Whatever your outlook – for inflation or markets – it is never a good idea to forget about basic financial needs in retirement.

JD dorfJD Dorfman is a senior agent at Mass Mutual Arizona in Scottsdale. According to Dorfman, “I feel financial safety as a whole will always be a staple in retirement advising, forecasting, and planning. The best strategy is a safe one – and so I like annuities that guarantee income. They’re safe, guarantee a return, and provide lifetime income. Do you really need anything else?”

So that’s how a handful of advisors are looking and planning and investing in the Covid-19 era. Care to share your views? Email us at This email address is being protected from spambots. You need JavaScript enabled to view it..


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