COVID-19 still rages throughout much of the world, and no one can say for sure when the financial volatility will calm down. Does that mean you should change your retirement strategy? Maybe. Iff so, how? There are lots of factors to weigh in terms of whether (and how) to change course.

If you’re still working, you should keep funding your retirement accounts and possibly add even more money to an IRA.
If you’re out of work, preserving what you have in your retirement accounts should be a high priority.

While it’s often useful to draw on the lessons of the past, history sometimes has little to offer. Unlike the Great Recession of 2007-2009 or the Great Depression of the 1930s, for example, the recent economic crisis in the U.S. wasn’t driven by financial fundamentals but by society’s deliberate effort to shut down large parts of the economy. The closest parallel may be the so-called Spanish Influenza pandemic of 1918, although that played out at a time before Americans gave much thought to retirement and when life expectancy in the U.S. was significantly shorter.

Some economic commentators are now predicting a swift economic rebound and even alluding to a new Roaring Twenties akin to the one that followed the end of the First World War and the 1918 pandemic. Others aren’t so sure. And in any case, it’s worth remembering what came after the original Roaring Twenties, namely the Great Depression.

So what’s a conscientious retirement saver to do? That depends in large measure on your current work status.

People who were lucky enough to have money coming in–either from their own work or that of a significant other–were in decent shape to ride out the financial crisis. And happily, many who lost their jobs or were temporarily furloughed in 2020 have since returned to the workforce. If you’re currently working and saving for retirement through a 401(k) or similar plan, it’s smart to stay the course, even if your employer, like many, temporarily suspended its match.

In fact, if you’ve been working from home this past year, you may actually have more cash available because of reduced commuting expenses, less frequent dining out, and so forth. That could be an opportunity to put additional money aside for retirement by contributing to an IRA. For 2021, same as for 2020, the maximum contribution is $6,000, or $7,000 if you’re 50 or older.

People who lost their jobs in 2020 and have yet to rejoin the workforce are obviously in a different situation. Your goal should be to preserve your retirement savings to the extent possible. That means taking advantage of unemployment insurance and any other assistance you’re eligible for through existing programs. You may also be able to negotiate with your creditors, such as mortgage lenders and credit card companies, to reduce, postpone, or spread out any payments you owe them.

If you have an emergency fund, as financial planners often recommend, and haven’t already exhausted it, you may want to tap it first.

Some 401(k) loans and early retirement-plan withdrawals shouldn’t be your first recourse if you need cash. A 401(k) loan will typically have to be repaid within five years–and sooner than that if you lose your job–while a withdrawal can trigger income taxes and also mean you’ll have that much less money saved for retirement. On the other hand, they could cost less than other types of loans. Weigh your options.

Whatever you do, don’t neglect your health insurance. A large, unexpected medical bill can be financially devastating and possibly lead to bankruptcy. If you still have health insurance, your insurer may be willing to extend your payment deadlines if you ask.

Finally, if the financial crisis cut into your retirement savings, or made it difficult for you to keep contributing, think about retiring a little later than you originally planned, once you’re back in a job. Working a while longer allows you to save more, and delaying Social Security–up to age 70–will mean bigger monthly benefits when you begin to collect them.

If you’re out of work and have to draw on your savings, as a general rule it’s best to start with nonretirement accounts and try to leave your tax-deferred retirement accounts alone for as long as possible.

Those who have already retired from the workforce are in yet another situation. If your retirement income–from Social Security and other sources, such as pensions and systematic withdrawals from your IRAs and other retirement accounts–is sufficient to pay the bills, you may not need to change much of anything.

It could be difficult, however, if you have adult children who saw their incomes evaporate in 2020. The impulse to help your kids is an admirable one, but it can become a problem if it causes you to spend savings you’re depending on for retirement. Harsh as it may seem, it’s worth remembering that people who are still of working age have years ahead of them in which to catch up, while retirees have much less time and opportunity.

When the worldwide COVID-19 crisis finally comes to an end, we all may want to take stock of our finances. Meanwhile, now could be a good time to:

The pandemic and resulting financial crisis caused some wild swings in the stock market, with the Dow Jones Industrial Average (DJIA) up hundreds of points one day and down hundreds of points the next. If you have cash to spare and can live with the volatility, stocks may still present the best opportunity for long-term growth.

If you’re simply trying to safeguard what you have, you should at least make sure your money is allocated the way you want, among stocks, bonds, and cash. If the stock market’s recent volatility has given you the willies–or if you are coming up on retirement fairly soon–you might consider shifting into a somewhat more conservative portfolio and consider Investopedia’s advice on how to achieve optimal asset allocation (including a range of model portfolios from conservative to very aggressive).

If you didn’t have an emergency fund before 2020, you probably wished you did. And if you did have one, you may have drawn it down and need to replenish it. There are numerous philosophies about structuring emergency funds. Some suggest saving at least three months of living expenses in a liquid account, while others recommend having six or more months’ worth. Achieving even that lower figure can be painfully difficult when you’re living paycheck to paycheck, but it’s a goal worth building toward at any age.

If you’re about to enter retirement, or already there, you may want a substantially larger emergency fund. Keeping two or three years’ worth of expenses in, for example, a money-market or short-term bond fund could help you weather another crisis while leaving the rest of your retirement portfolio intact. That could save you from being forced to sell investments at the bottom of the market. This is especially true once you reach 72 and have to take out required minimum distributions from tax-advantaged retirement funds.

Consider keeping a cache of emergency-fund savings in those funds, as well, to use if the market plummets. And if there is no crisis, all the better.

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