Taylor Says

by Taylor Kovar

Can I Still Afford to Retire After the Coronavirus?


Hey Taylor -

 I'm suddenly on the fence about retiring. I'm 52 and had been planning to cash out this year, but the pandemic has me a little nervous about making the change. Should I hold off or stick to the plan? - Olivia

Hey Olivia -

This has become the big question for a lot of people. In the last three months, the Dow has traveled about 15,000 points in either direction, making investors feel anything but safe with their retirement funds.

In theory, you need to have enough in savings to withstand these downturns. That's not always the case, but it's what we should prepare for. Let's talk about what you need to feel comfortable in your decision.


  1. What can you use now? If you're retiring at 52, you must have money beyond your traditional retirement account to keep you afloat for the next seven years until you can withdraw without penalty. A lot of early retirees plan to live off of 4% of whatever they have in their brokerage accounts, since that theoretically allows you to take earnings without touching the principal. If you have, let's say, $5+ million available, you should be able to withstand the downturn long enough for things to recover. On the other hand, if you have less than a million, you might be cutting it close at a time when people really can't afford to cut it close. Trust the systems, but don't let too much ride on hope.

  2. Work if you can. With things as tumultuous as they are, if you have a good, safe job that provides a useful service and brings in significant income, you might want to stick it out for another year. Especially with travel being on hold and so many of the normal luxuries off the table for retired people, you could get pretty bored without a job. Assuming you keep the position and earnings for another year, that lets your savings go further and also gets you a year closer to when you can start pulling from retirement accounts as needed. 

  3. How flexible can you be? Anyone looking to retire needs to address this, not just those doing so while facing economic turmoil. Do you think you'll be able to adjust your lifestyle enough to weather a 30-50% drop in your portfolio, or will that have you running out of money too quickly? Do you have prospective sources of income like consulting or a freelance trade that can supplement your savings? Is part-time work something you might lose on account of the pandemic? Trust that the economy will recover, but also take stock of how adaptable you can be in the short term.


It's hard to adjust to the things outside of our control, especially when they threaten our livelihood. Whether you continue with the retirement plan or work another year depends on what you've got and how much you need. Just be honest with yourself and you'll find the answer. Stay safe!