SALT LAKE CITY — Does the coronavirus pandemic have you looking for a loose change between the couch pillows? Shane Stewart, a certified financial planner, joined Live Mic with Lee Lonsberry Friday to discuss how some people are raiding their retirement savings during the COVID-19 pandemic.
“What advice do you give to clients who are worried about their financial future, paying the bills and day-to-day finances?” Lee asked.
“We hope that someone has taken our advice well in advance and put away something for savings, something for an emergency,” Stewart said. “Unfortunately, many people don’t do that.”
He urged listeners to put something into savings with every paycheck because emergencies can happen to anyone.
For those laid off from their jobs because of the pandemic, Stewart advised prioritizing the expenses that could be cut — even if just temporarily.
“As a financial professional I can’t make that decision,” he said. “It’s personal. They’ve got to make that on their own. But they really have to cut back and find ways to make do.”
“It took me years and years and years to get over the pressure to buy stuff and go places and keep up with Mr. and Mrs. Jones,” Lee said.
Cracking open retirement nest egg
Nearly three in 10 people have decreased the amount of money they’re setting aside for retirement during the pandemic. Some have stopped saving altogether due to the economic fallout of COVID-19, according to a FinanceBuzz survey published in August.
Stewart pointed out that U.S. government has allowed people to access their 401(k) without penalty for early withdrawal, and the taxes are spread out over the next three years.
“I would make that a last resort because what you’re doing is stealing that money from your future self,” Stewart said. “The current self has the need — but future self has the need as well.”
He advised cutting back on expenses as much as possible or asking family or friends to help with finances.
Stewart said picking up a side job or gig always helps the bottom line — but he stressed the important of being mindful about spending.
“If people don’t also address their spending habits on the outflow side, it won’t matter what they make,” he said.
Live Mic with Lee Lonsberry can be heard weekdays from 12:30 p.m. to 3 p.m. on KSL NewsRadio. Users can find the show on the KSL NewsRadio website and app.