Stephanie Schill, a married mother of two, was worried about her retirement savings when the coronavirus pandemic pummeled the global economy in the spring.
Schill, …
Stephanie Schill, a married mother of two, was worried about her retirement savings when the coronavirus pandemic pummeled the global economy in the spring. Schill, a marketing manager for a dental company in Johnsburg, Illinois, said the firm cut her salary by a quarter and eliminated her 401(k) match to conserve cash and reduce layoffs. But the unprecedented event turned into a financial awakening for her, she says. Schill began maxing out her 401(k) after she saved hundreds of dollars on daycare costs with her two children at home. “I want to retire as quickly as possible. Financial freedom will give me the flexibility to do that,” says Schill,38, who had her salary restored after ten weeks. By that point, she found a new daycare for her children that was 20% cheaper. That put more money back into her pocket to invest, a plus since stocks were at bargain prices, she says. “I’m going to keep plowing toward my retirement goals,” says Schill. “You can’t time the market. You have to remove the emotion regardless of the wild ride.” After stocks sold off in the spring, some Americans, like Schill, are happy with their retirement balances again following the market rebound. On Tuesday, the S&P 500 rose 0.2% to 3,389.78, eclipsing its previous Feb.19 high to finish at the highest closing level on record. That means this year’s bear market, or a drop of more than 20% from a peak, from the February high to the lows on March 23 was the shortest in history, according to S&P Dow Jones Indices. While retirement accounts saw sharp swings in the second quarter due to the uncertainty surrounding the outbreak, investors boosted their IRA contributions, driving record-breaking flows to retail retirement accounts while contributions to 401(k) plans remained steady, according to Fidelity Investments. So why is the stock market at records while the U. S. economy is in one of the sharpest economic downturns since the Great Depression? Here’s what the experts say: Although stocks are back at highs, millions of out-of-work Americans are still suffering after a mind-boggling 56.
