08-04-2025
How should retirees feel about their investments amid stock market fluctuations?
As the stock market continues to fluctuate, anxiety levels for many retirees, as well as people close to retiring, have spiked.
Some feel as though their financial status is at risk.
Jim Lyons, financial advisor with Edward Jones, said there's no doubt when things go down, no one likes it and people can get nervous, but said it's a normal part of the investing process.
According to the U.S. Census Department, there are more than 70 million Americans who take part in employer 401K programs.
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But when it comes to your 401K, it can be tied closely to the market's performance.
And with some people seeing a dip in their investments, it's caused paranoia for some when it comes to what they should do with their money.
'The emotions of investing are tricky because your body is telling you to do something different than what you should be doing, but if you recognize that's the way it is then you can be calm,' said Lyons.
If you're close to retirement or are already retired, you shouldn't be relying on the stock market for income.
Financial experts said people at this stage of life should be much more conservative in their investments than if they were younger — They should be in the process of planning on taking some income from your 401K, rolling it over, or moving it over to an IRA in their own name.
Lyons says age-based 401 K s are another good option, where you set it for when you plan on retiring, and it automatically rebalances based on that.
In those instances, your downturn should be a lot less than someone who is much deeper in stocks right now.
'We've seen downturns in 2000, downturns in 2020, one in 2008, and now this of this magnitude. You want to make sure you plan for them in advance because you know that they're going to happen,' said Lyons. 'What you can control is the diversification of your account, so how much stocks to bonds you have, and then the quality of the investments that you have. How you determine good quality is just how they perform against other investments that do what they do.'
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The University of Michigan's Consumer Sentiment Index showed a 12-year low for the month of March, meaning people clearly aren't feeling good about the market.
But that can also be an opportunity for riskier investors.
'When it's low and people feel bad about things, the one year return the next year averaged about 14% a year. When people feel good, a one-year return a year later is about 5% a year,' said Lyons.
Lyons said if you're a young investor, though, it's a good time to save and to invest in long-term options that can spring up after the market bounces back.
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