Has virus-induced volatility affected your retirement plans? If it has, you aren’t alone. A recent survey of Fidelity investors shows almost three-quarters of investors who plan to retire in the next five years are rethinking their plans for retirement because of the impact of COVID-19.

While global markets have shown signs of recovery since their steep sell-offs, reduced pension savings pots remain front of mind for those with one eye on giving up work. 61% of respondents due to retire within the next five years have seen the value of their retirement savings fall. And more than half of all surveyed are worried their savings will no longer provide them with the level of income they require in retirement.

The result is a growing acceptance that continuing to work for longer than anticipated is a likely scenario for many. 54% of the cohort planning to retire before 2025 now say they will have to defer downing tools in order to address their pension shortfall.

And while this kind of unwelcome reassessment can make us want to shield the rest of our savings by selling investments and waiting in cash, rash movements now are even more unwelcome.

Staying put in the investments we have chosen for the long term allows us to take part in the recovery now too - getting out locks in those losses. As markets have shown us in the past few weeks, that recovery is likely to be very uneven among sectors and industries. This gives the managers of your funds the chance to show their worth and use the current environment to buy into companies on their watchlists at cheaper prices.

Those aiming to retire within the next few years might have to contend with an uncertain path to recovery and be ready to adapt their plans if need be, but keeping contributions ticking over is important now too. The value here lies in the tax relief you’ll continue to receive as well as the ability to buy the assets you like at lower prices. Think carefully before you reduce or suspend your contributions - risk aversion right now could end up contributing to a shortfall in your eventual savings pot.

If you are considering how a volatile patch can affect your ability to draw an income from your investments, now is a good opportunity to think about how to adapt to a variable income stream. Will your needs be the same every month or can you afford to build in a buffer, reducing your spending when you need to? 

Lockdown has meant lower discretionary spending for a lot of us, cutting out work-related costs like lunch and commuting too. Factoring in various scenarios now, before you retire, could show you how you can adapt before it happens in future. And much the same as an investment trust strategy, can you reserve income when the going is good, in order to smooth out income payments when dividends are cut or income is harder to come by?

The current situation will undoubtedly leave many of us with more questions than answers. But, controlling the controllables is all we can do now - planning for all eventualities and not allowing behavioural bias to prevent us from taking part in a market recovery have never been as important.

Read more on Covid-19 and your retirement


Important information: The value of investments and the income from them, can go down as well as up, so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. Tax treatment on pensions depends on individual circumstances and all tax rules may change in the future. Withdrawals from a pension product will not be possible until you reach age 55. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser.