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Planning for Retirement in an Uncertain World

Corina Davis.

In the years following the onset of the COVID-19 pandemic, everyone saw their lives take unexpected turns. One such detour saw countless young people swerving away from their savings. Many were left with no choice but to place retirement planning on the back burner.

However, remaining vigilant about one’s finances despite economic shake-ups can be the best plan of action for ensuring long-term financial security. Corina Davis is the founder of the Davis Group as well as the managing director and a wealth management advisor at Merrill Lynch Wealth Management Group. She has more than two decades of experience in the industry helping folks plan for the future.

We asked Davis to provide some insight on how to navigate some of those roadblocks.

Plan for the Unforeseeable

Davis’ philosophy when advising her clients on their retirement is that it’s not a one-size-fits-all kind of thing. Retirement plans are personal — they can wholly depend on factors such as age, lifestyle costs, income, pending debts, and current investments.

“We have to be prepared to really plan and illustrate different life scenarios,” Davis said. “We have to provide clear data about the success of the client and what their individual goals are.”

When making decisions that could affect saving, such Davis’ philosophy when advising her clients on their retirement is that it’s not a one-size-fits-all kind of thing. Retirement plans are personal — they can wholly depend on factors such as age, lifestyle costs, income, pending debts, and current investments. “We have to be prepared to really plan and illustrate different life scenarios,” Davis said. “We have to provide clear data about the success of the client and what their individual goals are.” When making decisions that could affect saving, such as taking out a loan or landing a higher-earning position with your employer, it’s important to assess how your next move could affect meeting your retirement goals.

“Advisors, like myself, can step in and help them really visualize and quantify how those decisions could affect the future of their retirement or their legacy for their families,” Davis said.

Saving Versus Paying Off Debt

“It definitely depends on what type of debt you’re dealing with,” Davis said.

We have been in a historically low interest rate environment for well over a year now. For those with fixed-rate loans, such as a car or home loan, Davis advised not to accelerate payoff s on low rates but instead make sure that you are continuing to make your payments and save on a monthly (or bimonthly) basis.

The story changes a bit if you have variable debt.

“According to our CIO, we expect three to four interest rate increases this year, which means it will become more costly for people to carry around that variable debt,” Davis said.

In that case, she said, it’s best for people to work with a financial advisor to weigh the pros and cons of accelerating their payoff with variable debt versus saving for retirement.

Women Should Plan for the 100-Year Life

Studies have found that in most parts of the world, women tend to live longer than men. In developed countries, women on average live between four to seven years longer than their male peers. So, what does this mean for women when planning for retirement?

“At some point in their lifespan, they may be on their own and will have to be kind of financially self-reliant in their later years,” Davis said.

Women should be aware of this and factor it in when making their lifelong plans for saving.