Retirement expert: 'The pandemic is a wake-up call' for everyone
One expert says the coronavirus pandemic should serve as a cautionary tale for Americans saving for retirement.
“The pandemic is a wake-up call,” Luke Lloyd, a wealth advisor at Strategic Wealth Partners said on Yahoo Finance’s Final Round (video above). “It’s really for everybody — not just older generations but also younger generations.”
Read more: Retirement planning: Everything you need to know
Lloyd alluded to how nearly a quarter of Americans tapped into or plan to tap into their retirement accounts because they lack adequate three to six month of cash savings.
“I think a lot of people did not have that 3 to 6 months now and thankfully the PPP program along with the stimulus from the federal government kind of helped bridge that gap, so nobody felt the pain that was really needed,” Lloyd said.
‘You don’t want to hold losers’
While billionaire investors such as Warren Buffett have extolled the benefits of passive investing in the past, Lloyd said that era is long gone.
“You have to be proactive rather than reactive,” Lloyd said. “A lot of people I’ve talked to said they didn’t look at their accounts from February, March, April, and May [because] they’re scared.”
Lloyd brought up the technology sector as an example.
“People over 5-6 years who didn’t want to get into technology — they missed out on a ton of opportunity,” he said. “Technology is expensive but it's where the growth is right now.”
Read more: How to stay on track for retirement during the pandemic
Lloyd added that whereas the past 10 years might have suited investors if they left their accounts alone, the next couple of years will follow a different story.
“Because things are [now] so different there’s no one strategy for you, but what it comes down to is all the variables that come with that proactive strategy versus reactive,” Lloyd said. “From a retirement perspective, you don’t want to hold losers but hold winners.”
Dhara is a reporter Yahoo Money and Cashay. Follow her on Twitter at @Dsinghx.
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