While many Albertans are feeling uneasy about their money in the wake of COVID-19, those who are retired, or nearing retirement, might be feeling a different sense of uncertainty. Colleen Gillam-Judd has been an investment advisor with Servus Wealth Strategies and Credential Securities for 10 years and has some reassuring messages for anyone who’s trying to understand how to react to a drop in the value of their investment portfolio.
Colleen Gillam-Judd, Investment Advisor Servus Wealth Strategies and Credential Securities, shares insight into considerations for seniors and individuals approaching retirement in light of the effect COVID-19 has had on Alberta’s economy and global financial markets.
1. How have your members been feeling about their investments?
Colleen acknowledges that the last six to eight weeks have been a challenge for many Albertans, between COVID-19 and the steep drop in oil prices. Combined with the 24-hour news cycle there have been a lot of the same gloomy messages over and over, which can wear on our moods and outlooks. “At first I was recommending people turn off the news,” she says. “Social isolation is already challenging – then you get your investment statement in the mail and it’s not as good as it was in January.” She reminds her members that going back to their financial plan can offer much needed reassurance.
“The plans we put in place are built to withstand this,” says Colleen. Having worked in the financial industry during the economic crash of 2008, Colleen has first-hand experience that the market is resilient, and it will come back (maybe even faster than we expect). “Do we think companies like Telus or Rogers are going to go away in the next six months or in a year – no,” she says. She jokes that with three kids at home, she’s also confident Netflix isn’t going anywhere either. “Overall, the banking sector in Canada is in a great place,” she says.
Colleen knows everybody’s view on money and risk is different, and that someone still working in oil and gas feels different right now than someone who’s retired. She says the conversations she’s had with her members have been very insightful. “You learn a lot from talking them through their risk level and what that really means in times like these.”
“It’s a scary situation, but this isn’t forever,” Colleen says. “We’ll be golfing again, travelling again, eating out again. Nobody enjoys it, but it is a normal function of the market.”
2. Should I be changing my investments or what should I be doing right now?
Sometimes a lack of certainty or depth of understanding can lead people to feel overwhelmed, fearful or like they need to react. Before doing anything, Colleen’s advice is to have a conversation with your financial advisor. “Now is a perfect time to bring it all to the table,” she says. “There’s no judgment. This is the time to learn.”
Colleen sees a correlation between a person’s understanding of their financial portfolio and decreased stress levels. “The more confident you feel about your accounts and what’s going on inside of them – the better you’ll feel overall,” she says. “When you talk with your advisor, you’re going to have good conversations about whether your investment risk-level is appropriate for both your personal risk tolerance and your long-term goals.”
Overall, she’s seen very little change in the investment strategy for most of her members. According to Colleen, she’s also seen some people looking at the current market as a buying opportunity, as stock prices of some of the world’s largest companies are lower than normal. Some people are looking to take advantage of the strong likelihood that those prices will rise again.
3. Are there any government plans to help people that are in retirement right now?
A lot of emergency funding announcements have come from the federal and provincial governments lately. While Colleen says there hasn’t been a program announced specifically to benefit seniors or those already in retirement, the Government of Canada did make changes to Registered Retirement Income Fund (RRIF) accounts that may be applicable.
According to Revenue Canada regulations, at age 71 you have to convert RRSP accounts into RRIF accounts and there’s a minimum amount you must withdraw annually. “If you’re currently collecting income from a RRIF account, you have the opportunity to decrease that minimum withdrawal by up to 25%,” she says. If you’re able to do so, lowering your withdrawal means you’ll be leaving more funds inside the RRIF account, which might benefit you depending on your unique goals.
This is not to say nothing could be announced,” Colleen adds. “We’ve seen things change rapidly and if that happens, Servus advisors will do their best to contact eligible members.”
4. I’m hearing that I should wait for the market to come back, but I don’t have time. How should I react?
“This is a valid and normal concern,” Colleen says. “Anytime we see a market drop like we have this spring it makes us concerned whether our investments will come back to the place where they were at previously.” If you’re feeling like you don’t have time to wait, Colleen’s advice is to address this with your advisor right away. “It might be that there needs to be a methodical shift from how you’re currently invested toward how you should be invested given where you’re at in your life stage to better fit your circumstances.”
Through it all, Colleen is finding light in her conversations with the members she’s been working on financial plans with for years. “For me it’s a positive message. Yeah, the market looks bad, but your portfolio looks really good. We built the plan for this and you’re in a good place.”
Servus Wealth Strategies Ltd. is a subsidiary of Servus Credit Union Ltd. offering financial planning, life insurance and investments. Mutual funds, other securities and securities related financial planning services are offered through Credential Securities, a division of Credential Qtrade Securities Inc. Credential Securities is a registered mark owned by Aviso Wealth Inc.