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Your Pension May Quickly Be 'Infected' by Coronavirus Panic Following the week that the coronavirus tanked the Dow Jones, it was only a matter of time before ripple effects started to make their appearance. One of the ripple effects that will likely impact some retirement savers is panic stemming from the virus' potential impact on public and corporate pensions. Of course, both types of pension programs have been running on fumes for years now. The coronavirus may just be the straw that breaks the camel's back. In a recent example from England, an article from The Guardian notes, "Savers are nursing losses approaching 10% in their pension schemes since the start of the coronavirus market panic." The article laid out the math:
Imagine waking up after a restful weekend only to find that 10% of your nest egg – the one you worked for decades to build – had fallen off a cliff. "That was the oh my God moment where things are not only about to fall apart, but crumble," says financial advisor Michell Goldberg. According to an earlier piece on The Independent, this new "black swan" appeared to be impacting pensions back in early February:
A little over a month later, the full impact of the coronavirus on pensions has yet to be felt. Corporate Pensions Are On the Hook Too Pension plans at big corporations like GE (which has one of the largest) have been on the chopping block for some time. A recent article on Barron's asked an important question about GE's pension plan as it pertained to this newly evolving coronavirus threat: The article continued by giving part of the answer (emphasis ours):
The main takeaway is, whether bad fundamentals or panic from coronavirus "infects" a corporate pension program, retirement savers should also pay close attention and stay in touch with their plan administrators. Either source of panic could cause a pension program (corporate or public) to become a statistic in a heartbeat. How to Guard Against Pension Programs On Thin Ice The truth is, the majority of public and corporate pension programs have already escalated close to crisis levels. So if yours was to get cut by 10% over a weekend (or stopped), what would you do? One possible solution is to do whatever it takes to ensure your retirement gets on firm ground as soon as possible. Consider diversifying your assets and taking back control of your portfolio. One asset class to consider adding is precious metals, such as gold and silver, which can add stability during uncertain times.
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