Even when COVID is gone, the effects will linger on.

During the course of my career I have guided my clients through five different market downturns. The most recent market slide was fueled by the COVID-19 pandemic and the multitude of problems it created.

Unemployment skyrocketed and businesses were forced to either shut their doors or have their employees work from home. Some, unfortunately, went out of business altogether.

So, of the five, this was most different of all. Because it’s the first downturn I’ve experienced that wasn’t caused by a problem somewhere in the economy. And yet, from an economic perspective, the world would be totally different today if it weren’t for COVID-19.

On a positive note the markets have generally rebounded fairly well since the nosedive earlier this year. As a financial advisor, one of my responsibilities is to guide clients in real time through periods of uncertainty. Sometimes it’s necessary to make decisions on the run in order to avoid financial minefields.

But another role of an advisor is to help people prepare for an unknown future. Unless they have a crystal ball, nobody can predict precisely what will happen. Long term, I continue to be optimistic, but I have a strong feeling that the world after COVID will be significantly more expensive.

First, I think those that doubt capitalism should take a look at the quest for a COVID vaccine. Scores of competing organizations are working around the clock to discover and market a vaccine. I think this will prove to be a good example where private industry and competition lead to a successful vaccine sooner than later.

If the search were government controlled, I believe we’d be way behind where we are today. Constant political bickering and controversy would substantially slow or even bring the process to a standstill.

But thanks to private competition we may have vaccines later this year or early next. Of course, the firms that bring them to market will need to be compensated. That means you’re going to pay for them. Who knows how much? And the cost may not be covered by insurance. In any event, once we get through the pandemic it’s likely that, overall, health insurance costs are going to increase.

Looking ahead, I’m also mentally preparing my clients for higher taxes. The government keeps borrowing and the Fed keeps printing money at an alarming rate. Our debt level is unfathomably deep. At some point Uncle Sam will struggle just to pay the loan interest, let alone the principal. And you can be sure he’ll want more of your paycheck and retirement nest egg to pay those mounting bills.

There’s a move to bring more of our manufacturing back to America. A noble objective to be sure. But I believe it would be naïve to think that it won’t lead to higher costs that will undoubtedly be passed on to consumers.

In the short term, I also see higher medically related expenses and higher costs for goods and services in addition to increased tax rates.

These are just some of the reasons I feel it’s necessary to build a nest egg even larger than you would have prior to COVID-19. I think we’ll beat the pandemic medically before we beat it financially. And we’ll feel the economic ramifications for many years to come.