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Retirement Hacks: Retirement accounts in the red? This simple strategy could be the key to keeping your cool.


Even some of the most aggressive retirement savers and investors might find themselves a bit nervous these days with talks of a recession and a market downturn, so the best strategy for those in it for the long haul: distract yourself. 

Retirement Tip of the Week: With markets acting up, and lots of red ticker symbols in recent weeks, if you’re a skittish investor, do your best to avoid checking your retirement accounts altogether. 

Analysts anticipate a rocky journey for Wall Street and its investors this year, and some economists foresee a recession with mass unemployment. The Dow Jones Industrial Average
the S&P 500

and the NASDAQ Composite Index

— three of the major indices investors use as benchmarks — have been on a downward spiral in the first half of 2022, with much uncertainty as to when that will come to an end. 

Of course, the market is still quite volatile — although much of the news has been gloomy — the Dow did pick up at the start of the week, just a few days after it had its worst week since 2020. Some analysts expect the stock market to tick upward by Dec. 31, too. 

Have a question about your own retirement concerns? Check out MarketWatch’s column “Help Me Retire”

As many advisers tell their clients: There’s no way to time the market, and that includes where it will peak or bottom. 

Now is not the time for investors with sensitive stomachs to watch their portfolio balances sway. Many retirement savers may have seen their account balances drop thousands of dollars, if not tens of thousands of dollars, in the last few months, and that can be overwhelming and scary for anyone, whether they’re five years out from retirement or five decades. 

Investors shouldn’t ignore their portfolios completely, either. Many financial advisers caution clients — especially those closer to retirement — to remain calm during moments of market volatility and downturns, but there are instances when investors may need to act (especially if they should have already done so and tried to time the bottom of the downturn). In those cases, reach out to a financial professional who can help you determine the best course of action for your retirement plans and timeline. 

And those who are watching their balances tumble should reach out to a professional who can provide context or guidance for next steps. One other important task, when creating an investment account or at any point thereafter, is to know your risk tolerance, and find a level of comfort with your investing. 

The key — at least for the time being — is to distract yourself. One surefire way to keep your eyes away from your accounts is to set up automatic contributions to a 401(k) or an IRA, so that you don’t have to log in to your account to put money towards your future. Logging in may give you a reminder or a report on how the portfolio has been doing since you last saw it, and if notifications are in the red, some worried investors may be discouraged from contributing. That would be a shame, as those contributions would likely go toward buying investments at a discounted price. In fact, investors with a little extra cash might actually want to put more into their investment accounts during a time like this to take advantage of the lower prices. 

Those who have their 401(k) accounts or IRAs housed at the same financial institution as their savings or checking accounts may want to try to hide their 401(k) or IRA from the main page, so that they’re not constantly reminded of what market volatility is doing to their portfolios when they log in for their everyday banking. 

And don’t check your account too regularly. Once every few months is more than enough for retirement accounts that aren’t needed any time soon. 

Want more actionable tips for your retirement savings journey? Read MarketWatch’s “Retirement Hacks” column

Retired investors who can avoid withdrawing from their retirement account should do so, as that will help to preserve the assets they already have. Taking money while markets are down can lead to the sequence of return risk, which means portfolios may generate less in returns over time because a portion of the account was taken out during a low period. Instead of checking on and dipping into your account, review your budget, and see if there are other income sources you can rely on, such as Social Security, a part-time job, a pension and so forth. 

Young investors with decades to go until retirement are typically advised to stay away from their retirement accounts completely. 

For those who are simply too nervous to keep investing, continue to save. The Federal Reserve recently announced it was increasing the federal funds rate and plans to continue doing so the rest of this year and next. That increase could affect borrowers, who may see higher interest rates on their loans, but it could also be beneficial for savers, as banks may increase the interest rates tied to their savings accounts and CDs. If investing seems too risky for you, and you just can’t take your eyes off your portfolio, put that money away in another vehicle so your savings continues to grow. 

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