The stock market has been in an all-out free fall over the past week or so as the coronavirus has altered daily life as we know it and taken the Dow with it in the process.
Yes, we’re in the midst of a pandemic as we speak, and though we hope this setback is just a temporary one that will subside within the next month or two, it’s hard to feel good about things right now with all that has changed and will become the new normal in the near-term. And one of those things that we’re certainly not feeling good about right now is the state of our 401K retirement savings.
But we’re not trying to drive even more panic on the matter, we’re simply just here to provide you with some do’s and dont’s to help you get through these times. Here’s a look:
DON’T: Check Your Account Obsessively
Now isn’t the time to panic about your retirement savings, especially if you’re a younger worker with decades of work to go. And though you’ll likely see a bigger loss percentage earlier in your career when you’re more aggressive with your strategy and look to grow your account, there is always going to be ebbs and flows. Remember, the market swings in stride.
DO: Start Thinking About When Exactly You’ll Retire
This will help dictate your savings strategy. Like we said above, if you’re younger you’ll want to be more aggressive with your savings strategy. But as you get closer to retirement age, you’ll want to get much more conservative so that a market swing doesn’t cost you big time. So in market downturns such as this, make sure you reassess your retirement savings strategy and ensure you’re on the right track.
DO: Check Your Asset Allocation
This is also largely dictated by your age, but now may be a good time to reassess how your investing is working for you. If you’re nearing retirement age, consider moving some funds and/or buying fixed income assets. This can help become part of an overall more conservative strategy the older that you get.
DON’T: Panic
We’ll say it again, the market goes in ebbs and flows and is largely dictated by investor emotion. Though we’ve been hit pretty hard by the coronavirus pandemic, now is not the time to panic, whether you’re young or old. If you’re young, you have plenty of time to make up the difference before you reach retirement age. And if you’re old, hopefully you’ve transitioned your investment to a more conservative overall approach. If you didn’t, reassess where you stand and make any necessary changes. But don’t panic, and certainly don’t rush into making any knee-jerk decisions. And whatever you do, don’t take out an early withdrawal. Stay the course because things will likely soon be looking back up.
