Don’t Make the Same Mistakes in 2021 – Keep Your Retirement Plan on Track

Looking back at 2020 gives retirement savers a good perspective for how to proceed going forward. Staying flexible and being prepared to change course are two attributes that every good plan needs.

A man runs in his lane on a track.
(Image credit: Getty Images)

No crystal ball or vivid imagination could have foreseen the major events of 2020 that rocked American society.

COVID-19 had an immense impact on the economy and caused wild swings in financial markets, but it also provided a couple of big lessons when it comes to retirement planning: Prepare as best you can for anything, and learn quickly from your mistakes.

With 2020 now behind us, here are a few tips on how to reassess your retirement plan and best protect it from adverse societal and economic conditions:

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Build flexibility into your plan

If the past year taught us anything, it’s that we have to prepare for a lot of potentially bad things that can happen to our financial futures. You need to construct a thoughtful and flexible retirement plan. With this type of plan, you can make the appropriate adjustments in your portfolio and avoid excessive losses if bad-case scenarios “a,” “b” or “c” happen.

Those who are building retirement plans can start by asking how exposed their assets and investments would be if disruptive economic events were to occur and what that exposure would mean to their retirement funds. People can get caught off guard if they don’t prepare for the worst. Last year, we got hit by a pandemic and the market fell 20% to 30% in a month. Now questions persist into 2021, such as, what if we go on with a high rate of unemployment, you become unemployed due to layoffs, and the market fluctuates wildly?

We help investors and families build plans designed to plan for the best, but prepare for the worst – in doing so flexibility is key. There are a lot of different scenarios that could play out that may cause you to need to act and make the appropriate changes within your plan: layoffs, unemployment, sickness, an increase/decrease in taxes, need for more income, loss in values due to market corrections just to name few. As situations arise you want to make sure you have the flexibility to control and actively make the appropriate changes to allow yourself to either avoid or minimize any potentially negative impact, and to take advantage of any potentially positive ones. It’s also important to always stay focused on your overall plan and the long-term big picture. With a solidly build plan, you may be OK to not make changes as well, as sometimes too fast, or too many changes can ultimately detract from and even derail your plan.

Review and adjust as applicable

It’s one thing to say that you have a plan, but if it’s never reviewed and evaluated in the context of new market conditions, what good is that plan? It’s like pilots flying from New York to California; they have a flight plan, but flying conditions and arrival times can change due to turbulence and air traffic. It’s necessary for the pilots to make in-flight adjustments.

Those planning their retirement prudently should monitor their investments and market conditions regularly and get into a quarterly or semi-annual rhythm of reviewing their entire plan with their adviser. They should be prepared to make changes, such as buying new holdings that may provide potentially better growth and/or income; sell current holdings that may have gains to capture and/or have potentially more risk ahead than you should be exposed to; reallocate your overall portfolio for your current phase of life, risk tolerance, income needs, tax exposure and market conditions. Doing so doesn’t mean the last fund or stock they bought was bad, it just means that the financial landscape at the time indicates it’s worth considering adjustments in order to reach retirement goals.

Some people are hesitant to make changes; they’re in that “get it, set it and forget-about-it” mode. Whereas periodically reviewing whether you’re off track or on track toward your retirement goals is the right course of action. Change within the plan can be a good thing, because it allows people to take advantage of opportunities.

There was a lot of opportunity that presented itself in 2020 — such as when the overall markets and a lot of companies across the world lost value early in the year, this actually presented a good opportunity to invest/buy more at lower/discounted prices. There were also several industries and companies within that benefited quite well from the changes we went through, not only for business, but personal lives as well, such as the shipping industry, online shopping and virtual learning and communication companies – one good example is Zoom. People need to be prepared to take advantage of changing circumstances going forward.

Focus the plan on your long-term big picture

We’ve got to be careful not to let a bad day, bad week or bad quarter derail what we tried so hard to accomplish for 20 or 30 years with the plan. Don’t get too emotional and make bad decisions that are potentially going to have long-term, permanent consequences based on a short-term situation.

Diversify your portfolio

Diversifying helps reduce volatility. Look at your plan and determine how much exposure should you have to U.S. versus international stocks, for example, or the exposure you should have to equities versus bonds or fixed-income alternatives. Fixed-income alternatives might include CDs, indexed annuities and options that allow for growth but also have some insulation and protection from volatility built into them. You can also leverage asset classes, such as fixed-income annuities, indexed annuities, life insurance or other alternatives that don't have the inherent risk and volatility that the stock market may have.

Planning ahead can help you protect your retirement portfolio, even during unpredictable events. It’s about thinking through scenarios and considering the various options available so you’re ready for just about anything.


Investment Advisory Services offered through Great Lakes Investment Advisors, a Registered Investment Adviser with the state of Michigan. Insurance products and services offered through Great Lakes Financial Freedom Group. Great Lakes Investment Advisors and Great Lakes Financial Freedom Group are affiliated companies.


The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger was not compensated in any way.


This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Jason F. Cryderman, Investment Adviser Representative
President, Great Lakes Investment Advisors, Inc.

Jason F. Cryderman is the president and co-founder of Great Lakes Investment Advisors, Inc. He helps educate and empower families to make better decisions with their money. Jason is a licensed Investment Adviser Representative and holds licenses in health and life insurance, as well as variable annuities.