While the COVID-19 pandemic began to sweep the world as a health crisis, the reality of the global economic destruction quickly became evident as countries began to shut their doors and close their borders. Suddenly, stock markets tanked and personal finances went from calm to turbulent as fears about the virus spiked.
Many economic advisors have begun to throw around the word “recession” in the United States, bringing up terrifying memories of the Great Recession of 2008. Fears of lost jobs, depleted accounts, and missed bills are on the minds of everyone. While some recessions can be mild, there is no true way to know the full extent of the economic destruction caused by COVID-19 until the dust settles.
When it comes to healthcare workers, two of the most common concerns when it comes to the economic downturn are student loan repayment and retirement accounts. Here are a few insights as to how to appropriately and responsibly handle both during the economic downturn of coronavirus.
Paying Student Loans: Reevaluate Your Strategy
When it comes to paying for those medical school loans, it is important to know your options at this unique moment. Currently, the federal government has given the option to suspend student loan payments without incurring interest through September 30th. If you have the cash available to continue paying your loans, by all means, continue to pay! However, should you find yourself in a cash crunch due to COVID-19, you can take advantage of this opportunity to defer payments and move your budget money around to handle other financial needs.
This may also be a time for you to reconsider your current repayment strategy. By contacting your loan provider, you can work with them to develop an income-driven repayment plan that works with your current income level, This is a great option should you find your income falling due to layoffs or furloughs.
On the other hand, if you don’t anticipate taking a hit financially during a recession, then you can take advantage of low-interest rates by refinancing your loans. That means trading out your current student loans for a new one with a lower interest rate.
You can refinance federal student loans, but you lose out on income-driven repayment and opportunities for forgiveness like Public Service Loan Forgiveness.
Keep Calm With Investments and Retirement
Stock market shakes and rattles can cause a lot of panic when it comes to investments and retirement. However, based on the previous history of the market, it is important to remain steady and calm.
Behavioral economists call the desire to sell when the market goes down “loss aversion.” However, when you sell shares of your investments as prices are falling, you risk locking in your losses over the long term. A better tactic is to remain calm and continue keeping your portfolio diversified.
Don’t cause yourself undue stress by checking the numbers every day. Instead, focus on your long-term goals, and continue to allocate money to your retirement as you are able. If you haven’t been moving money to your retirement savings, the current crisis is a great time to evaluate your budget and jump in on some lower-priced stock options! As always, partner with a trusted financial advisor who can walk you through the entire process with a calm and steady hand.
Apollo Is Here to Help
Any time a crisis strikes, it can be tempting to cut and run to avoid the pain of the moment. However, in the COVID-19 pandemic, we can take comfort knowing that we are all in this together – globally.
At Apollo, our mission is to connect the best professionals to opportunities to serve in healthcare facilities that are in need. During the COVID-19 pandemic, Apollo is committed to connecting qualified individuals with a passion for healing with the locations that need them most. To learn more about Apollo and the services we offer, contact us today.