July 7th 2020,
 Did you have a Plan B to properly face Corvid-19 ? 
Barely six months ago, we were experiencing full employment, extraordinary economic growth and rising stock markets. Two cars in the driveway, two trips a year, the cottage up North and so on. Total happiness!

Out of nowhere came COVID-19 to seriously threaten our life’s perfect Plan A. Loss of jobs, collapse of stock markets, unprecedented personal confinement, even fear of dying … total confusion. COVID-19 has threatened the foundations of our way of life, even our joy of living.
 
Who had a Plan B?
In professional sports, all teams carry « Plan Bs ». For example, If Dr. Duvernay-Tardif, a guard on offense for the Kansas City Chiefs, gets injured, they have a replacement ready to take his place. They use a new strategy to protect their quarterback that factors in the absence of Duvernay-Tardif. « Plan B » will never be as good as « Plan A », the presence of the star player, but it should be enough to get by if the team changes some of the plays they use.

A Plan B is a strategy that makes it possible to face a disaster like the COVID-19 pandemic. Plan B should minimize it’s negative consequences such as difficulties to meet financial obligations, job loss, reassessment of the retirement date. It will never be as appealing as Plan A, but it will avoid total disaster.
 
We were living in a personal and truly ludicrous collective unconsciousness.  « Mother Earth » sent us a wake-up call.

Let’s take a few minutes to look at what a Plan B could have been.
 
From the perspective of our personal finances
The cash account: we will never say it often enough, it is important to have a cash reserve that allows us to make it through for at least six months in the event of job loss, illness or an unforeseeable situation.

Insurance budget allocation: your Plan B should put people at the center of priorities by ensuring that financial resources remain available in times of uncertainty.
 Disability and critical illness insurance to cover basic needs and debt payments.Sufficient life insurance amount to secure the well-being of our loved ones in the event of sudden death.From a corporate point of view, plan for situations such as the buyout of a partner who dies or becomes disabled without jeopardizing the survival of the business.Why hesitate to allocate the necessary budget that will provide us with this assurance in the event of disaster?
 
From the perspective of your retirement
Now let’s analyze the consequences of COVID-19 on your retirement strategy.

If you are 5 years or more away from retirement
We are living in a period of great market volatility. It is tempting to anticipate our retirement by using a technique that experts call « Market Timing ». If you decide to take this path, stick to your investor profile and do not lose sight of your long-term goals.
 
If you are 5 years or less from your retirement
You had established, with your advisor, a perfect Plan A that led you to the dream retirement. COVID-19 imposes that you adjust this plan to transform it  to a Plan B.
 Analyze the possibility of postponing your retirement for a year or two.You could apply for your Québec Pension Plan (QPP) earlier than planned.Could you work part time for a few years?Could you reduce your lifestyle now to save more for retirement?
A Plan B tailored to the situation will certainly reduce your stress level.
 
If you are already retired
The disbursement of your retirement fund is certainly the biggest challenge you are currently facing. You need money to live and your investments have lost value.

With your advisor, you certainly established a disbursement strategy that takes into account the risks of volatility.
 
What could you do to design a realistic Plan B?Reduce certain expenses such as travel, renovations, new car.Use the money ​​accumulated in your life insurance policiesUse your low interest line of credit instead of selling stocks at a loss. 

You would benefit from concocting a Plan B with your advisor to get through this crisis without losing too many feathers!

Sincerly,

 Mauro DiCesare, B.Comm, Pl.FinPlanificateur Financier/Financial Planner 
Financial Security Advisor/Conseiller en Sécurité Financière avec Groupe Financier Finvest Inc.
Mutual Fund Representative/Représentant en épargne collective avec Investia Services Financiers Inc.
514-376-7771