How to get your retirement back on track after 2020

May 8, 2021

The COVID-19 pandemic made 2020 a rough year for many reasons, including retirement planning. Whether you’re a baby boomer nearing retirement or a millennial working to save for the future, you’re not alone if you’ve been forced to veer off course last year.

Before the pandemic, 6 in 10 Americans reported being on track with their retirement plans, according to TD Ameritrade. However, that number has fallen to just 4 in 10.

Fortunately, there are plenty of ways to bounce back from a less-than-ideal situation that wreaked havoc on your retirement plans. This might mean having to make — even more —sacrifices or creating a different plan than originally intended, but you can do it.

Here’s a look at 10 common scenarios people faced with their retirement plans in 2020, along with advice to turn things around for the better. Keep reading to learn how to make the meaningful changes that will give you the financial security you deserve in your golden years.

You borrowed money from your 401(k)

As a result of the pandemic, 29% of people have either borrowed against their retirement savings or are thinking about, according to TD Ameritrade. If you made this move, you’ll have to pay the money back, plus interest, within five years of disbursement.

Look for ways to trim your budget to get the money back into your account as quickly as possible. For example, you might get a second job, trim your grocery budget — i.e., eat more pasta — get rid of cable or institute a 24-hour rule for all online purchases.

Watch out: 35 retirement planning mistakes that waste your money

You lost your part-time seasonal job

Before the pandemic, you were working a second job to save for retirement. Unfortunately, you were laid off, so now you’re without that income stream.

No doubt this is disappointing, but there are other ways to get extra cash to fund your retirement account. If you’d rather work from home right now, plenty of companies offer remote part-time jobs. For example, you could be a contract tracer, customer service rep, online tutor, transcriber or even a fashion stylist from home. Use job sites like and ZipRecruiter to find openings.

If you’re not interested in another second job, track your expenses to look for ways to cut back — i.e., stop buying coffee out — so you’ll have extra money to set aside.

Read more: These are the best banks of 2021 – did yours make the cut?

You depleted your emergency fund

Due to the pandemic, 38% of people have either withdrawn money from their emergency fund/savings account or are considering doing so, according to TD Ameritrade. Don’t panic if you had to do this to pay the bills, as there are plenty of ways to rebuild your savings.

If there’s another stimulus check — and you’re in a better place financially — consider depositing it straight into your emergency fund. You could also pick up a side gig and/or trim your budget down to bare necessities to earn back the cash you spent.

Find out: How to protect your retirement savings during the coronavirus pandemic

You stopped contributing to your 401(k)

You’re not alone if you had to opt-out of 401(k) contributions this year. However, you want to make this break as minimal as possible, so you don’t fall too far behind.

No doubt, you probably stretched your budget as far as possible before hitting pause on your 401(k) contributions. If you don’t see an end in sight, it might be time to consider looking for a new job with a higher salary. Despite the record-high unemployment levels realized in 2020, many companies are thriving and able to offer a competitive salary and benefits package.

Also, worth noting: If you’ll be age 50 or older by the end of the calendar year, you can make a catch-up contribution of up to $6,500.

Guide: The complete guide to the best retirement age

Your employer reduced or eliminated its 401(k) match

Several large companies, including Choice Hotels, Best Buy and Marriott Vacations, have suspended their employee 401(k) match programs because of the pandemic. If your employer made this move, it will impact your monthly savings goals.

If possible, try to increase your contribution to make up for the loss. Either way, ask questions to find out when the company expects to bring this perk back. Ultimately, if the company still doesn’t reinstate the program when things get back to normal, it might make sense to look for a new job.

Find out: Is now a good time to raid your 401(k)?

This year has been a wild ride for the stock market. If your 401(k) hasn’t fared so well, it’s easy to panic. However, before changing your asset allocation, it’s best to talk to a financial planner. (iStock)

You were supposed to retire, but didn’t

When 2020 first began, you thought you were entering your final year in the workforce. However, the pandemic forced you to rethink your plans because you’re nervous about losing your steady paycheck and employer-sponsored healthcare.

More than half (55%) of employed Americans are planning to work in retirement due to the COVID-19 pandemic, according to Voya Financial, Inc. If you’re able to, and feel more comfortable doing so, working part time in retirement might be a good idea. Talk to your employer and see if you can work something out that’s mutually beneficial.

Good to know: Chick-fil-A and 23 more companies with surprisingly great 401(k) plans

Your 401(k) took a hit

In fact, your 401(k) provider might have experts on hand to assist with your portfolio. They’ll be able to help you decide if you need to reallocate or just have patience and wait for things to get back to normal.

Account types: What is aRoth IRA?

You’ve been providing financial support to family members

The pandemic has caused millions of Americans to endure financial hardship. If your loved ones have been struggling, it’s only natural to want to help in any way you can. However, if this is impacting your retirement savings in any way, you need to set boundaries.

For example, if an adult child moved back in with you, ask them to pay rent. This will help offset the costs of having more people under your roof, while still helping them get back on their feet.

See: Essential money tips for surviving the ‘pandemic spiral’

You had to take a pay cut

Nearly one-third (30%) of employers instituted pay cuts due to the pandemic, according to a survey conducted by executive and business coaching firm Challenger, Gray & Christmas, Inc. Of those, 55% took this action to avoid layoffs.

If you’re in this position, you might not have enough extra money to keep contributing to your 401(k) — at least at the same level. Try to find extra room in your budget, so you can save at least something in the interim.

There might not be much else you can do right now. If after a while there’s still no end in sight for your pay cut, consider seeking employment at a company not struggling through the pandemic.

Did you know?: 50 best (and worst) cities for an early retirement

You felt forced to take Social Security earlier than expected

Technically, you’re retirement age but you were planning to work a few more years. You wanted to wait to start taking Social Security retirement benefits because the size of the monthly payment increases the longer you hold out.

Unfortunately, your employer struggled financially due to the pandemic, which led you to early retirement. You’re now receiving smaller monthly Social Security checks than expected, which has thrown off your plan.

Consider supplementing your income with a part-time job. This will allow you to enjoy financial stability, so you don’t have to make uncomfortable sacrifices.

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This article originally appeared on How to get your retirement plans back on track after 2020