Tips for reducing long-term financial disruption amid COVID-19
Jill Garvey from Huntington Private Bank joined The Final Round to gives her tips for reducing long-term financial disruption due to COVID-19 and how to adjust your retirement plan amid market uncertainty.
Video Transcript
MYLES UDLAND: Welcome back to "The Final Round" here on Yahoo Finance. Myles Udland with you in New York. As we wrap up the week and the month, let's think a little bit about what's going on with all of our retirement plans. And joining us now to discuss is Jill Garvey. She is with Huntington Private Wealth. And so Jill, let's talk about how we can maybe get our heads around what's gone on in the last few months and not make any rash decisions that might set us back in the future. What have been the concerns that you've seen over the last few months most often with your clients and folks you're talking to?
JILL GARVEY: Myles, things are so out of one's control right now. I'm trying to get my clients to focus on what we can control. And one of those things would be lifestyle expenses. So I think it's really important to get involved with your finances and take control of your money. And one way you can do that is to revisit the am-I-on-track conversation, rerun financial projections, and see where you may need to adjust your goals. And if you do need to make adjustments, that's great. That's information. That's empowerment. You can pivot then. If you don't have any information and you don't know, then I think that causes stasis.
MYLES UDLAND: And then thinking about-- I think people that are closer to my age look at those plans and they're like, never going to meet that, not going to worry about it. But they also don't have enough emergency savings. And I think that's been an important theme for a lot of people during this time. When you guys see client accounts, do people have enough stashed away to make it three, six, nine months, which I think a lot of people, unfortunately, are going to be forced to do here?
JILL GARVEY: That depends on how old someone is, what their feelings on reserves are, where they have access to cash. So what we always counsel our clients to do with the Huntington Private Bank is to make sure you have at least three to six months. Although right now, I'm definitely erring on more the sixth-month, even the 12-month side. So that depends. And if you don't have an emergency fund, you should target that six month build-up in cash.
MYLES UDLAND: And then thinking about what we've seen in the markets in the last couple of months, and right now the NASDAQ is on track for a record close, and we've seen a couple of those in the last few weeks, have you gotten incoming from folks who say, hey, I might have screwed up. I need to be more in the market. Has sentiment, I guess, changed in the last few months, as we've seen the price of stocks go higher?
JILL GARVEY: That's a great question. Sentiment certainly has changed. As we know, this is a wonderful environment for borrowers. Really tough for savers right now. So our clients have been forced to take a little more risk if they want yield. And of course, we've been looking at avenues other than equities. Dividend-paying stocks is an example. We're looking into high yield bonds and global REITS to help those investors who are more income-oriented get that income they seek with treasury yields so low right now.
MYLES UDLAND: And then, I guess it's sort of tangential to retiring but it's certainly a lifestyle type question, and that's, what's going on in housing right now? And we've seen mortgage rates right now, record lows, the kind of levels that some people never believed we'd ever see. And it seems like everyone has refinanced, right? But is that a simple step? If you haven't done it yet, if you're still paying 5.25% on your mortgage, is that something that you've had a conversation with someone about? Because that could be hundreds of dollars per month if you get that mortgage payment lower.
JILL GARVEY: Oh, absolutely. We're having that conversation multiple times per day. I've had five of those conversations today. So absolutely. Refinance. Look at the 30-year rates. Look at the 15-year rates. See where you can save. And then we're also talking to our clients about where you can put that excess cash. Some clients have opted to, if they have a house that's completely paid off, take out a cash out refi and invest that money in the market to do a play on the difference between what they're paying in interest and what they can earn, the total return, in the market. And if you're a long-term investor, that may be a good play.
MYLES UDLAND: All right. Jill Garvey with Huntington Private Wealth. Thanks so much for joining the program. Take care. We'll talk soon.
JILL GARVEY: Thanks, Myles. Pleasure.
