As the stock market plummets amid coronavirus fears, retirement accounts have also plunged.
Certified Financial Planner Terri Jackson has seen 30 years of economic roller coasters. As president of Jackson Financial Group in Tallahassee, she’s handling many clients who want to buy into the market now that stocks are available at deep discounts.
“We’ve had such a run up for so many years,” Jackson says. “There are a lot of people who are scared and who don’t want to participate in the market anymore, but there are also a lot of people who see it for an opportunity and want to take advantage of it.”
But Jackson says the current environment shows that funding your IRA to the detriment of a plain old savings account is a bad idea.
“We find in a lot of these downturns, individuals don’t have enough cash savings really because they just wanted to invest in the stock market and get a higher rate of return than those bank deposits that were earning virtually zero.”
Many of her clients are small business owners who are feeling the effects of the coronavirus pandemic. She’s helping them put together an emergency financial plan.
“We’ve had to stop a lot of retirement contributions,” Jackson says. “We may have to start taking distributions from retirement plans to get people kind of over that hump of being stuck at home and not being able to work.”
Jackson says easy access to cash can help anyone weather any financial crisis.
“Times like this really show the need for that asset allocation to have some cash, maybe some bonds,” Jackson says. “It just really helps you cushion the blow in a drastic market correction like we’re having.”