How Does Long COVID Affect Your Retirement Planning?

Planning for retirement is at least partially about building a financial structure that will support you or your loved ones if something happens, including illness or disability.

And the potential for that “something” has risen in recent years: Almost 1 in 5 adults age 50 and over say they’ve had symptoms of long COVID, according to a 2023 survey from AARP. Common effects include fatigue, brain fog, difficulty breathing, anxiety, depression and gastrointestinal issues, and 39% have had symptoms for a year or more.

“So many people got infected with COVID, you have a much bigger number of people who are infected with a significant chronic disease,” says Carolyn McClanahan, a physician-turned-certified financial planner in Jacksonville, Florida.

At the heart of the matter, long COVID isn’t unique in the way it impacts your retirement strategy — but it does reinforce that a successful retirement plan must hold up to unexpected illness. Here are some tactics to make your plan more resilient.

At any stage of life, it’s important to have cash on hand in case you need it. “Too many people sock money away in retirement plans where it can be harder to access if you have an issue,” McClanahan says.

Depending on your life circumstances, you may want to have as much as six to 12 months of savings set aside. Your savings can help you make ends meet if you get sick and can’t work, or if you’re waiting for disability benefits to kick in.

“Life happens, emergencies happen,” says Ashton Lawrence, a CFP in Greenville, South Carolina. Instead of having to tap a home equity line of credit or take on debt, he says, you’ll have this cash sitting on the sidelines for emergency situations.

A basic estate plan might include a will, advance directive and both medical and financial powers of attorney. This helps ensure that if you’re incapacitated or unable to speak for yourself, your health and your affairs will be handled the way you want them to be.

If you didn’t work with an estate planning attorney to create your plan, have one review your documents to make sure they were executed correctly. Requirements for powers of attorney vary from state to state, says Shari Fleming, an estate planning attorney in Owings Mills, Maryland.

Fleming also encourages her clients to write a letter of intent that puts their wishes down on paper, such as the goals behind their estate plan or how they’d like the end of their life to go. “It’s not a legal document, but it does fill in the blanks,” she says.

Don’t skimp on health coverage — get the best plan you can afford. If you’re under 65 or still covered by an employer plan, make sure you have the money to cover the plan deductible if you need medical care. “If you have long COVID, you’re pretty much going to max out your deductible every year,” McClanahan says.

If you’re eligible for Medicare, McClanahan recommends Original Medicare with a Medigap policy for greatest flexibility. “With Medicare Advantage, you’re basically locked into your insurer’s network, and they’re the ones who get to ration your care,” she says. “If you have traditional Medicare, you don’t have that issue.”

“I have clients that maybe aren’t as prepared for retirement as they need to be, and they tell me, ‘I know I’m going to have to work until I’m 67 or 70,’” says Liz Windisch, a CFP in Denver. “What if you get sick? What if your partner or parent or sibling gets sick and you have to care for them and can’t work full time?”

Windisch encourages her clients to get more aggressive with savings goals, and if they can’t save more, to get a roommate or a part-time job to make it happen. “I hope you can work until you’re 67 … but we need to plan as if you might not be able to do that,” she says.

Because there’s always the possibility of incapacity as you get older, streamlining your finances makes it easier if someone has to step in to manage things. Consolidate accounts, keep a list of usernames and passwords, and keep a folder with at least one statement from each bill that you pay.

Noah Damsky, a financial adviser in Los Angeles, has a client who was very independent before she started experiencing long COVID symptoms. Since then, her family has had to get more involved in her life. “We’ve got to make sure other family members are playing a more active role in some of the things they didn’t [do] before, like making sure some bills get paid, doctors are seen, things like that,” Damsky says.

If you have disability insurance through your employer, consider paying for higher coverage, if you can — employer plans for long-term disability usually replace just 60% of your income. Consider, also, a life insurance policy with a disability rider, which is generally less expensive than buying a disability policy independently.

Gregory Corneille, a CFP in Lawrenceville, Georgia, recommends life insurance with critical and chronic illness riders for people who have little or no disability coverage. Critical illness riders cover things like cancer, heart disease and lung disease. Though carriers may not have updated their coverage definitions to include long COVID specifically, long COVID causes some of the issues on the list, Corneille says.

You can also buy a life insurance policy with a long-term care rider, so you can use the death benefit to pay for long-term care costs like a nursing home or a home care worker.

“We’re going to find a lot of people that have a lot more health problems than they used to,” Windisch says. “COVID affects people in ways we haven’t even realized yet.”