Getting Financially Back on Track After the Pandemic

Those that know me, know that I am an avid reader with an interest in history.  This past weekend, I came across something interesting about the resilience and strength of humans. It was a story about how people historically have bounced back from past pandemics and other significant life events. While the COVID is the most recent and significant example of such an event, the author of the story notes that there have been other events of similar nature – and most of us bounced back without lingering or long-term “side effects”.

The author actually wrote a book in 2019 titled, “The Psychology of Pandemics: Preparing for the Next Global Outbreak of Infectious Disease₁.” How timely this was, coming out just before COVID actually hit! In his book, Steven Taylor, a clinical psychologist and professor in the psychiatry department at the University of British Columbia states, “All of the phenomena we’re seeing today have been seen in past pandemics. In fact, the parallels outweigh the differences, not just in the 1918 one, but in other pandemics, too. The rise of anticipatory anxiety before the actual spread of infection in communities. The rise of racism, blaming people, conspiracy theories.”

There was panic buying, remember the run on toilet paper?  There was fear and avoidance of health care workers, and there was the rise of anxiety about getting infected. And conversely, there was also this disregard for the whole thing, thinking it was exaggerated. The big difference is everything is faster and more visible today due to the 24/7 news cycle, social media and so forth, but it’s fundamentally pretty much the same phenomena. 

But folks, his over-arching message is what I am most interested in: it’s that people have – and will – bounce back. We’ve seen signs of it this year as more folks become vaccinated and a lot of them have returned to the office. Schools have resumed in-person. And it’s a little easier to find canned and paper goods, too.

I expect that this time of healing will continue for the coming year, but one area that will likely need our attention for the longer term is our finances. The effects of job losses, reduction in hours, emergency withdrawals from our savings accounts and retirement plans, and even family illnesses or deaths, are far reaching for many. For these folks, it will likely require a longer time frame and concerted effort to make up for the strain of the pandemic.

For example, a 2021 State of Retirement Planning Study₂ from Fidelity found that more than 4 in 5 Americans said the pandemic’s economic fallout affected their retirement plans, with a third estimating they’ll need at least two years to recover. More than a third reported being more concerned about their ability to maintain a nest egg in retirement than before the pandemic.

But one surprising finding of the study was consumer optimism, and the fact that many have rallied themselves to get back on track. As you’ve heard me say many times, having a complete retirement system with downside risk mitigation strategies is crucial to set yourself up for the best chance of financial success in retirement. Remember what we always teach, that if you manage the downside, the upside can take care of itself. And frankly, people with financial plans feel better, and tend to do better – as well as have less anxiety and improved confidence.

Adding to consumer optimism is the resiliency of the stock market, which also likely played a role in that optimism. After bottoming out on pandemic fears on March 23rd last year, the S&P 500 rebounded, hitting a new high on March 17 this year, although it continues to be volatile in 2021 for a variety of factors. 

But if you’re still behind financially and need to play catchup, your age is a big factor. For younger people with the bulk of their working years ahead of them, a plan can be as informal as setting a target dollar amount and learning what types of available investments exist. But if you’re older and have less time to make up losses before retirement, we need a more aggressive and tailored approach. This is the time to meet with a qualified retirement specialist and map out where you are now, and where you need to be to retire. We can’t wipe away the past 18 months, but we can take steps to correct or even improve our retirement outlook with the right advice and tools. 

And while unpredictability is a constant in our planning – after all, which of us could have predicted a “black swan” event like COVID?  – our ability to recover and bounce back by taking action can alleviate some of the stress when emergencies like COVID strike. Remember, we can never predict what the markets will do . . . but that does not mean you should not be prepared.  Are you prepared?

So as always – be vigilant and stay alert, because you deserve more!

Have a great week.

Jeff Cutter, CPA/PFS is President of Cutter Financial Group, LLC, an SEC Registered Investment Advisor with offices in Falmouth, Duxbury, and Mansfield, MA. Insurance offered through its affiliate, CutterInsure, Inc. We do not offer tax or legal advice. Jeff can be reached  at This information is intended to provide general information. It is not intended to offer or deliver investment advice in any way. Information regarding investment services is provided solely to gain a better understanding of the subject of the article. Different types of investments involve varying degrees of risk, including the potential for loss. Therefore, it should not be assumed that future performance of any specific investment or investment strategy will be profitable. Insurance product guarantees are backed by the financial strength and claims-paying ability of the issuing company. Market data and other cited or linked-to content is based on generally-available information and is believed to be reliable. Cutter Financial does not guarantee the performance of any investment or the accuracy of the information contained in this article. Cutter Financial will provide all prospective clients with a copy of Cutter Financial’s Form ADV 2A, Appendix 1, applicable Form ADV 2Bs and Form CRS as well as the firm privacy policy. Please contact us to request a free copy via .pdf or hardcopy. 1. 2.