If you’ve been eyeing your 401k and feeling anxious lately, you’re not alone. Recent market fluctuations have caused a wave of concern among retirees and those nearing retirement, with many watching their nest eggs shrink just as they’re preparing to depend on them most.
The stock market’s rollercoaster performance has led to substantial losses in retirement accounts, particularly 401k plans heavily weighted in equities. For many older Americans, these portfolios were set years ago and haven’t been rebalanced to account for the increased volatility we’re seeing now.
Experts are now urging those approaching retirement to reassess their portfolios. A move away from high-risk equities toward more conservative investments like bonds, treasury securities, or even money market funds could help buffer against further losses.
What Retirees Can Do Now:
- Review Your Asset Allocation: Many financial planners recommend a more conservative split as you near retirement – think 60/40 or even 50/50 between stocks and fixed income.
- Avoid Emotional Decisions: Don’t panic-sell during dips. Instead, consult a professional about long-term strategies.
- Rebalance Regularly: Annual or semi-annual reviews of your 401k are critical to ensure your investments align with your risk tolerance and timeline.
Beyond individual action, the broader discussion is turning toward the reliability of stock market-based retirement savings in general. As the average lifespan increases and pensions become rarer, reliance on 401ks and IRAs has become the norm – but not without risk.
“The market doesn’t care how close you are to retirement,” said Grant. “It’s not personal – but the impact certainly is.”
With rising inflation, geopolitical tensions, and ongoing market volatility, more retirees are now considering partial annuities, diversified index funds, or even working with fiduciary advisors to protect what they’ve built.
If you’re nearing retirement, this isn’t the time to set your finances on autopilot. Your future stability could depend on taking proactive steps now.
Check with your plan administrator, speak with a certified financial planner, and revisit your long-term financial goals. The market will continue to fluctuate – your peace of mind shouldn’t have to.
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