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Retirement Planning > Spending in Retirement > Lifestyle Planning

Is Lockdown a Dress Rehearsal for Your Client’s Retirement?

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It’s March 2021, and the pandemic and its various lockdown phases is about a year old. Your client is bored and wants life to return to normal. What does normal mean to them? They will tell you it’s travel, going to movies and shows, dining in restaurants, unwinding in bars and attending sporting events. They are unhappy they can’t do these activities.

This could be a preview of your client’s retirement if they aren’t preparing now. Here are the ways life during the pandemic is like an unprepared retirement:

1. It’s neverending.

There doesn’t seem to be light at the end of the tunnel.

  • Pandemic: The vaccine rollout is happening, but the experts warn new strains of the virus are popping up. How much longer will this last?
  • Retirement: Your client stopped working. They might have 30 years or longer in front of them. Will they outlive their savings?

2. I’m stuck in the house.

A lot of the places you want to go are closed.

  • Pandemic: The lockdown varies. In the other countries most people need to stay indoors except for exercise. Stores are closed, except those providing essential services like groceries.
  • Retirement: You can leave if you like, but most of the things you would want to do cost money.

3. Can you afford it in your budget?

I want to see the children, but I can’t. They are under lockdown rules, too. It’s inconvenient, but it keeps people, especially older people, safe.

  • Pandemic: If they aren’t in your bubble, you shouldn’t get together. If they live across the country, they aren’t traveling anywhere.
  • Retirement: They have busy lives. They took jobs across the country. It costs money to visit them. Money you don’t have.

4. I’m waiting for a check from the government. 

Stimulus checks help. They keep coming.

  • Pandemic: The government has been sending several rounds of checks to people and businesses. The objectives are to keep the economy going and help people affected by job losses.
  • Retirement: Social Security has cost-of-living adjustments, but everyday prices often rise faster than inflation. You hope the government will increase benefits.

5. Is telemedicine the future?

It’s getting harder and harder to see your doctor.

  • Pandemic: In the UK, elective surgeries and other procedures were put on hold. Doctors saw patients via videocalls.
  • Retirement: Heath care costs are rising much faster than inflation. A logical solution might be to treat people remotely unless they have purchased an additional level of insurance coverage.

6. I can’t travel overseas. 

Borders are closed. Simple as that.

  • Pandemic: People are afraid to fly. Cruise ships haven’t been sailing for almost a year.
  • Retirement: Vacation travel is only available to those who can afford it. If you can’t, you are staying home.

7. I can’t dine out in restaurants. 

Winter weather has put a dent in outdoor dining.

  • Pandemic: Restaurants have cautiously reopened, but often at 25% or 50% capacity.  Some are closed and will never reopen.
  • Retirement: Restaurants might be open, but they cost money. You could spend $150 a couple on dinner when you were working, but retirement is a different story. It’s cheaper to eat at home.

8. I can’t meet my friends for drinks. 

Bars have been closed for a long time.

  • Pandemic: Bars and social distancing don’t seem to go together. Anyway, it would be difficult to drink while wearing a mask.
  • Retirement: Going out for drinks gets expensive. It’s cheaper to drink at home with your friends.

9. I can’t attend sporting events.

Even the Super Bowl had reduced seating.

  • Pandemic: Sporting events usually involve crowds entering and leaving then stadium.  Getting food and using restrooms pack people together. This isn’t happening.
  • Retirement: According to Statista, average ticket prices for Major League Baseball in 2019 ranged from $52 to $167. Can you still afford to be a fan?

10. Television is my only entertainment. 

But it’s much better than it was in our childhood.

  • Pandemic: Thank goodness for Netflix and other streaming services.
  • Retirement: According to Statista, the average monthly bill for cable TV in 2019 ranged from $51 to $100 for 34% of subscribers and $100 to $150 for 28% of subscribers.  Has your client included this in their retirement spending projections?

What’s the bottom line? During the pandemic, your client was stuck at home because of restrictions. Your client might be stuck at home during retirement because they don’t have enough disposable income to pay for the things they would like to do. The pandemic might be a wake-up call for retirement planning.