The Coronavirus is now center stage and deservingly so. This invisible antagonist has upended our world for the near term: schools and businesses closing, event cancelations – including literally all sporting events, the stock market on retreat, social distancing, and empty shelves at local stores.
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Thankfully, we finally have all hands on-deck in government. Republicans and democrats are cooperating and providing a unified front to help the country combat this national emergency. There are a few exceptions with some still trying to seek the high ground and putting party ahead of common sense.
There is reason to be concerned. Initially, there were those who thought the drastic steps taken were unnecessary and an over reach. According to the Center for Disease Control (CDC), the 1918 influenza pandemic was the most severe pandemic in recent history. It was caused by an H1N1 virus and spread worldwide during 1918-1919. Over 500 million people at the time or one-third of the world’s population became infected with this virus. The number of deaths was estimated to be at least 50 million worldwide with about 675,000 occurring in the United States!
My wife lost an uncle to the 1918 pandemic and it’s a wonder that more didn’t succumb to the disease. There were few if any medical remedies at the time to fight these infections.
According to recent reports the most susceptible are older adults who have serious chronic medical conditions such as heart disease, diabetes, and lung disease. If you are at a higher risk the CDC recommends following these guidelines:
- Stock up on supplies.
- Take everyday precautions to keep space between yourself and others.
- When you go out in public, keep away from others who are sick, limit close contact and wash your hands often.
- Avoid crowds as much as possible.
- Avoid cruise travel and non-essential air travel.
During a COVID-19 outbreak in your community, stay home as much as possible to further reduce your risk of being exposed.
This newsletter is targeted towards those planning their retirement and retirees, the most vulnerable group. It is best to avoid shaking hands when greeting others and maintain a safe social distance during the flu season. Actually, it would be best to suspend hand shaking all together. The CDC estimates that during the 2018–2019 flu season 35.5 million Americans got sick with influenza, 16.5 million people went to a health care provider for their illness, 490,600 were hospitalized, and 34,200 died from influenza! If we stopped hand shaking and stayed home when sick there could possibly be a significant drop in flu infections and deaths overall each and every year.
The fallout from this pandemic is all around us and personal, upending our daily routine. Most retirement account balances have cascaded downward at an alarming pace. I tracked the stock market during this event and the DOW dropped 29% from a high of 29,568 in early February to a fast tracked low of 21,200 on March 12th when the markets fell almost 2000 points in one day! It did feel like the sky was falling that day. Many panicked and sold into the down market driving it ever lower. I wrote several articles concerning ways to sleep at night when the markets are in a frenzy. They may help those who don’t know which way to turn on days like this:
In these two articles I talk about ways to minimize the downside on retirement accounts. The TSP is a great place to invest. The L Income fund invests just under 80% in the two bond funds with the remaining distributed in the C, I and S funds. It allows for appreciation long term that is designed to offset inflation and maintain your account balance even in times of turmoil. You can also invest in the G Fund that is guaranteed never to fall in value. I only wish there was a G Fund equivalent available in the private sector for other retirement accounts.
In 2008 the L Income Fund decreased 5.09% when the market fell off the cliff and dropped in value over 50%. The very next year the L Income fund gained 8.57%. It took the broad market years to recover. If stock market gyrations are keeping you up at night explore ways to protect your assets from future market shocks.
The key is to not panic, use common sense, and make sound decisions based on your personal situation. This event will pass like previous pandemics and life will return to normal.
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Find answers to your questions: The best time to retire, retirement income vs expenditures, FEGLI options and costs, TSP risks and withdrawal strategies, and other relevant topics. Determine what benefits to carry into retirement and their advantages. You will also have the opportunity to set up a personal one-on-one meeting with a CERTIFIED FINANCIAL PLANNER.
Helpful Planning Tools
- 2020 GS Pay Scales
- Retirement Planning For Federal Employees & Annuitant
- Federal Employee Retirement Benefits Seminars – Check Availability
- Financial Planning Guide
- Budget Work Sheet
- Medicare Guide
- Master Retiree Contact List (Important contact numbers and information)
- 2020 Leave and Schedule Chart (Use this chart to set target retirement dates.)
- Annuity Calculator (FREE Excel chart estimates annuity growth)
Disclaimer: Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that retirees, potential and existing investors conduct thorough investment and benefit research of their own, including detailed review of OPM guidance for benefit issues and for investments the companies’ SEC filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.
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Dennis V. Damp is an author, retired federal manager, business owner, career counselor and veteran. Damp is the author of 28 books, a recognized benefits expert, and a retired federal manager with 35 years’ service. Dennis has been a guest on hundreds of radio talk shows, CNN’s YOUR MONEY and the Lou Dobbs Cable TV shows, lectured at universities and colleges, produced Internet web sites and training videos, and has written hundreds of articles for national magazines and newspapers. His books have been featured in the Wall Street Journal, Washington Post, New York Times and U.S. News & World Report.
Dennis joined the Air Force in 1968 and spent over three years on active duty and an additional seven years with the Air National Guard. He was hired by the Department of Defense (DOD) after leaving active duty and transferred to the Federal Aviation Administration (FAA) in 1975. He spent the remainder of his career in various positions with the FAA. His last position was technical operations manager at the Pittsburgh International Airport’s air traffic control tower.