The phone calls from retirees and pre-retirees have started. Not many, but enough to get our attention.

As we are going to have to find a way to co-exist with the coronavirus, it will continue to change lives, goals and plans. It seems clear retirement goals and lifestyle intentions post Covid-19 may not be as expected.

The financial media is completely disinterested in the performance of an index portfolio with its construction split between various asset classes. Their focus has primarily been on self-funded retirees, specifically on those with self-inflicted woes.

And why wouldn’t they focus on this subject? Most of their readers are people who pick stocks and cram into the banks for super-low yields. Everyday media can write a new story about this stuff. When it derails, they can write a story about those affected.

With good planning, some retirees may already have a good handle on their circumstances. Staying home may have resulted in spending less, especially if they’re travellers or have active social lives. Market falls aren’t welcome, but an understanding they happen, along with a portfolio built to withstand them, offers some certainty.

Pre-retirees are another story. Those coming up on retirement may have the rug pulled from under them – in the short and long term. The various assumptions they made may no longer be reliable. The stability of their circumstances turned on their head.

The Wall Street Journal looked at this issue and covered a couple of real-life stories.

A 62-year-old Ophthalmologist Dr Sklar, who had been hoping to retire in a few years, decided he couldn’t risk seeing his portfolio take a bigger hit with Covid-19 impacting the share market.

When the pandemic hit, the value of Dr Sklar’s investments tumbled. So did his income from his private practice in Connecticut, which was forced to furlough staff and dip into emergency loans to keep its doors open.

He sold much of his stock holdings at a loss between February and early March. He said, “I don’t have 10 to 15 years left to recover my losses. At some point, I’ll need my cash to live on.”

He still owns some stocks but now has more cash as a percentage of his portfolio than he has in decades. The share market has clawed back much of its losses now.

According to Fidelity Investments, of the 7.4% of investors aged 65 and up who made a change to their portfolio between February and May, nearly a third moved some money out of stocks. Also, of the 6.9% of investors across all age groups who made a change to their portfolio between February and May, 18% moved some money out of stocks.

Based on those figures it doesn’t seem like a lot made changes, but every portfolio change is a human story. A response to a threat – perceived or real.

When someone sells in response to a downward market move it generally tells you one thing: their allocation to stocks was too high. It’s a broad statement, but it may stem from a range of scenarios – like not having a true understanding of risk, to life changes not being reflected in their portfolio.

The other story featured by The Wall Street Journal is in a different dilemma.

Mr Eberlin owns a woodwork-restoration business, he is 66 and hasn’t worked since late March because the pandemic has dented demand for contract work in Chicago residential buildings.

Eberlin didn’t sell his stocks because he didn’t have any. Why?

He missed out on much of the market’s stunning recovery after the global financial crisis (2008-09) because he never figured out a time to move more of his money back into the stock market.

In both cases we can see the most ruinous decisions made. Selling at the bottom and spending a decade in term deposits because you can’t decide on the right time to enter.

What was absent from the story? No mention of an adviser anywhere. Some appropriate portfolio construction and some guidance may have proven useful in navigating the turmoil.

Pre-retirement can be a vulnerable time. Plans may be derailed for various reasons. Pre-retirement as COVID-19 still hangs around will require a clear head along with judicious and flexible decision making. Goals may not have changed, but the ability to reach them may have.

Major changes and challenges in pre-retirement can be on par with major market falls in altering retirement plans. When they happen in conjunction with each other, keeping a clear head, staying on course or reevaluating circumstances may require a second set of eyes.

If things change, make sure your adviser knows. If you don’t have an adviser, consider engaging one.

• This article is prepared in partnership with Mancell Financial Group, Australia. The information provided, or any opinions expressed in this article, are of a general nature only and should not be construed or relied on as a recommendation to invest in a financial product or class of financial products. You should seek financial advice specific to your circumstances from an Authorised Financial Adviser before making any financial decisions. A disclosure statement can be obtained free of charge by calling 0800 878 961 or visit our website, www.stewartgroup.co.nz