How to manage retirement savings during COVID-19

The U.S. Census Bureau released a survey that about 60 million American households are expecting an income loss due to COVID-19 this month. Carol Petrov, Vice President at Kendall Capital, joins The Final Round to discuss how she is advising clients for retirement during the pandemic.

Video Transcript

SEANA SMITH: Now it's time for a retirement segment sponsored by Fidelity Investments. And for that, we want to bring in Carol Petrov. She's the Kendall Capital Vice President. Carol, it's great to have you on the show. First let's start with this survey that we got out from the Census Bureau earlier this week. It found that about 60 million US households expect income losses this month. When you take that into account and COVID's impact that it's having on the US economy, what are you telling your clients at this point?

CAROL PETROV: Hi, there, Seana. Thank you so much for having me. That is some disturbing news. And frankly, we are hearing that from some of our clients. They have been unable to return to work full-time. And so what we try to do for them, is plan ahead and make sure that they have enough cash reserves or conservative investments on hand to see them through times like these.

SEANA SMITH: How do you see the pandemic changing I guess, retirement plans? Because we talked about the fact that this is an uneven recovery, some of your clients I know are able to work from home, but some have also probably seen this as a motivation to retire or have at least thought about retiring a little bit earlier I guess, than they were initially planning to.

CAROL PETROV: Yes, you're absolutely right about that. And in fact, that reminds me of a client of ours. She's a doctor and due to COVID, she was unable to see as many patients as she normally would. So her income was cut drastically and she was already thinking about possibly retiring soon. So we got together, we reviewed her plans and helped her give her the confidence she needed to go ahead and retire now.

AKIKO FUJITA: So there's certainly a lot of people out there who are looking at retirement really in the next year or so, saying, well what do I do with my money that's in the market. There seems to be a lot of panicking that's happening, saying, should I just cash out right now, because there's so much volatility? What's the advice that you've been giving?

CAROL PETROV: Well, frankly, for our clients, we're trying to help them not make any knee jerk reactions, not do anything too drastic. But it is important to have that diversification in your portfolio. And that means earmarking some monies for retirement, money you might need today or the next couple of years, but frankly, you still have to look out 20, 30 years into the future. And you can't just be so fearful of the market. You really have to stay focused on the long-term. But make sure you can go ahead and afford to retire today and earn your own paycheck from your saving.

RICK NEWMAN: Hey, Carol, Rick Newman here. What are you seeing in terms of people having to tap into their retirement funds? Have you run into any people having to do this, obviously some middle or lower class people? I mean, we've got so many people who've lost their jobs, some people must be having to do that.

CAROL PETROV: Yes, Rick. And unfortunately, it's true. We do try to at least tell them what the tax implications might be. So if they're in the lower income brackets, it's a great time to go ahead and start spending down some of that pre-tax money that they had set aside. For example, we have some clients who are still trying to send their kids off to college. And unfortunately, even with COVID and digital learning, college expenses are the same. So we're helping them see the pros and cons of going ahead and taking some of that retirement money if they need to just to get them through this next hurdle.

SEANA SMITH: All right, Carol Petrov, great to have you on the show. Thanks so much for taking the time. Have a good weekend.

CAROL PETROV: Thank you.