The COVID-19 pandemic is causing millions of Americans to worry about their retirement savings and investments. Stocks are riding a roller coaster and the recent $2 trillion stimulus bill passed by Congress potentially means larger tax bills down the road to help pay for it.

[Despite the recent strong rebound], the stock market could be a wild ride going forward, which is a big reason people should seek more certainty in their planning. 

 And when the federal government dumped trillions of dollars on top of what was already a significant deficit, and with indications that more trillions are coming our way, you need to ask yourself, “When is the reckoning day on those packages?” 

It will come during your retirement; personal-income tax will go up in the future. Protecting yourself from that reckoning means being able to diversify your assets from tax exposure.

 I offer these tips to protect retirement money in the wake of COVID-19:

• Rely on a Roth IRA. It’s prudent to consider a Roth conversion to protect yourself from the inevitable tax increases heading our way to pay for the COVID-19 bailouts. One advantage of the Roth: It’s a retirement-savings account allowing your money to grow tax-free. It’s funded by your after-tax dollars, meaning you’ve already paid taxes on the money you put into it. In return, when you withdraw after age 59 ½ or in retirement, you pay no taxes, not even for the earnings on your investments.

• Beware of the bond market. In the past, many financial advisors recommended an asset mix of 80 percent in stocks and 20 percent in bonds for people who were investing over the long term. Then, as people got nearer to retirement, they would allocate more to bonds because of their stability. That idea has shifted. From where we are right now, there is no place but up for interest rates in the bond market. So that’s not the place for people to be in if they’re retirees, because bonds are not paying anything now, and the ones that have decent yield are at risk of cratering on you.

• Consider a fixed annuity or fixed-index annuity. A fixed annuity is a contract between the consumer and an insurance provider. With a fixed annuity, the insurance company guarantees growth of your principal and a minimum interest rate. It provides a way to save money over the long term, allowing interest to accumulate tax-deferred typically at a higher rate of interest than CDs. A fixed-index annuity also is a tax-deferred, long-term savings option that provides principal protection in a down market. Returns are based on the performance of an underlying index. It gives you more growth potential than a fixed annuity and safety and security unlike investment in the stock market. That can happen through the performance of the index, and the annuity can periodically lock in gains so the value does not decline if the index performs negatively.

• Consider a cash-value life insurance policy. An appropriately structured cash-value life insurance policy can be index-based, which gives you the potential of good growth in the savings. If you have that growing for a reasonable amount of time, you can get that cash value out tax-free to take care of things during your lifetime. It could have a higher rate of return than in a bank, and it grows tax-deferred.

 These are highly uncertain times, and planning for as much certainty as you can is crucial. This crisis does provide an opportunity for Americans to take a deep look at their retirement plan and be better prepared for unanticipated emergencies, while also protecting their long-term security.      

 Greg DuPont is founder of DuPont Wealth Solutions (www.dupontwealth.com). He has been serving clients as an estate and tax planning attorney in Ohio since 1992. A certified financial planner, he’s also been in wealth management for the past 14 years.