Statewide Iowa — (RI) — The COVID-19 pandemic has made a mess out of many Iowans’ retirement plans. A study by an investment advising firm shows the average Iowans’ retirement savings balance dropped from 423-thousand dollars in January to 367-thousand at the end of March. That’s a 13-percent drop over three months. Michelle Brownstein, vice president of Private Client Services at Personal Capital, says several factors are at play.
(As above) “One may be cost of living, so if someone lives in a more expensive area, they may not be saving as much for retirement,” Brownstein says. “There may also be population differences. If there is a slightly older population in a particular area, they may’ve saved a bit more than areas that skew a little bit younger from a demographic standpoint.”
The firm’s report shows Iowa ranks 12th out of the 50 states for the highest retirement savings average. As of June 30th, the average retirement balance for Iowans was a little over 415-thousand dollars, according to the report. Still, Brownstein says it’s more important to compare how your -own- account looks versus how Iowa ranks against other states.
(As above) “Are you personally on track to reach your goals?” Brownstein says. “If, for example, I lived somewhere really expensive or really inexpensive, to maintain my lifestyle in retirement is going to take a different amount of money once I get there to keep my lifestyle in the same format that I’ve become accustomed to.”
Looking at your 401k balance daily can “drive you nuts,” she says, and it may be smarter to only check in occasionally, as it should be an investment plan designed for decades, not day-to-day.
(As above) “The trick is to make sure that you have a great long-term strategy in place that you can stick to,” Brownstein says. “It’s tempting when there’s volatility in the market or just heightened uncertainty in a given period to want to make changes, to try and control things that you don’t actually have control over. You and I don’t control the market, as much as we might want to.”
What you -can- control are things like the amount of risk you’re comfortable with, the goals you’re setting for retirement, and your individual savings patterns over time. The Personal Capital survey found 89-percent of respondants said they’re worried about the financial impact COVID-19 is having on their retirement.
