Many people found themselves digging into their retirement savings during the pandemic, but it’s important you make moves to replenish what was used. We are stretching your dollar with tips to get back on track.
Lauren Dellolio is like millions of Americans, thriving in her career one day. And the next, thanks to the pandemic, out of work.
Lauren Dellolio said, “I have been out of work since November. I went from putting away roughly 20% a month…to absolutely nothing at this point except for a small college fund for Sawyer.”
And she’s not alone. About half of non-retired adults (51%) said the economic impact of the pandemic will make achieving their long-term financial goals more difficult, according to Pew Research.
But experts say there are ways to get back on track once you start getting a paycheck again.
Farnoosh Torabi, Finance Expert and host of the So Money podcast, said, “You have to be really committed to contributing extra for a period of time…so that you cannot just regain what you would have contributed, but also the compounding interest.
Her tips for jump-starting savings?
1. Make a plan — “If you were contributing, let’s say, 8% or 10% prior to losing your job maybe now you want to ramp it up to 12% or 15%.”
2. Make it automatic — “Directly out of your paycheck, directly out of your checking account, the same time every month.”
3. Reassess your budget — “If you do have to ramp up your contributions towards retirement. That may mean cutting back on some of your day-to-day or monthly expenses.”
And continue to search for that next job like Lauren is, so you can start saving again as soon as possible.
Also, it’s a good idea to use your time out of work to do something to improve your chances of landing a better gig. Learn a new skill, freshen up the resume, and network, network, network.