• Angie Franzone

Normalize Retirement Security


When I was in middle school I had a pin that I used to wear on my jean jacket (talk about aging myself) that said, ‘Why be normal?’ I tell you what, being normal feels pretty good right now. All the things we took for granted before the pandemic are slowly but surely returning. Backyard BBQs, concerts, sporting events, festivals, all those normal things. Unfortunately, one bit of normalcy that was created by the pandemic is retirement uncertainty.


According to a new report from the National Institute on Retirement Security, which surveyed more than 1200 working adults in December 2020, 67% of Americans say the nation faces a retirement crisis and 56% are concerned they won’t be able to achieve a financially secure retirement (Retirement Insecurity 2021, Greenwald Research). In addition, according to the report, among Americans who have changed or considered changing when they will retire, 67% say they are planning for retirement later than originally planned because of COVID.


If you panicked and moved completely to stable value last March, you likely did yourself a disservice. Not only is it difficult then to figure out when to get back into the market, but the market has fully recovered since March 23, 2020, in what was the shortest downturn in US history. “Stocks are a forward-looking mechanism. They don’t care about what is happening right now or what happened in the past,” said Ryan Detrick, chief market strategist for LPL Financial. “So much of why stocks have done so well this year is looking ahead to a really significant economic bounce in 2021 as the economy opens up due to the vaccines.”


As the below chart illustrates, the S&P 500, which is essentially a gauge of the stock market itself, had positive annual returns in 31 of 41 years, despite average intra-year drops of 14.3%. While past performance is no indication of future results, this is a pretty good case for staying in the market instead of panicking and selling out at the first sign of volatility.




The point is not to shame you if you did happen to sell out of the market, but to help you prepare for the next time of uncertainty and to reinforce that you did the right thing if you stayed put.


Three strategies to help you stay on track are:

  1. Developing a plan,

  2. Diversifying your portfolio and

  3. Reviewing your plan regularly.


Some important things to consider when developing a plan are: what age you are likely to retire, what you will do in retirement, how much it will cost and where the money will come from. Once you determine these things, you can set retirement goals and work towards them. Diversifying your portfolio as part of your plan can help stop you from making emotional investment decisions during uncertain times. Everyone has a unique set of circumstances that determines what the right mix of investments is for them.


By assessing your risk tolerance and reviewing your investing time horizon and retirement goals, an advisor at Spectrum can help you choose the right mix of investments for your individual situation. Once your strategy has been determined, reviewing your portfolio regularly (we suggest at least annually) is important to help ensure you stay on track to meet your goals. If you make this a normal part of your investment process, you will at least have one answer to the question of ‘Why be normal?’.