Bumpy markets have you worried? We can help.
How to understand the markets, think about the economy, and protect your money
Your most common questions, answered
When the markets swing up and down, you may have questions about your retirement and investment accounts. We’ve got answers.
During volatile times, it can be tempting to take your money out of retirement accounts until markets quiet down. However, this adage can help: It’s not about timing the market, it’s about time in the market. Jumping out, then back in, can upend the steady progress you’re making. In addition, when markets are lower, you’re “purchasing” more at lower prices—equaling the potential for higher gains when markets rebound. Read this case study about staying invested during market volatility.
When the stock market swings downward, it can seem (really) appealing to change how you invest in hopes of a better return. But unless you’re just a few years from retirement, changing to “safer” options may not be the best long-term strategy. (And you may be missing out on the growth potential that time in the market gets you.)
If you are very near retirement, there are investing tips that can help you manage market volatility. If your investments and risk tolerance aren’t in sync, you can take our risk quiz (PDF). A financial professional may help, too. Don’t have one? We’ll help you find a financial professional near you.
If you’re not permanently let go from your job, you may be eligible to take either a loan or another qualified plan withdrawal.* If your plan allows 401(k) loans and your employer has agreed to it, the loan cap is $50,000 or 50% of your vested account balance, whichever is less. If you’ve lost your job, you may be eligible for withdrawals.* Each retirement plan is different, so log in to your account to see what’s available. If you have issues, our contact center can help.
Tip: Unsure about next steps? These short- and long-term steps can help get you through a job loss.
* If allowed by your plan.
Worried about your hard-earned retirement savings?
Uneasy about the economy?
Staying invested when markets get bumpy
You may feel unsure about your investments when the markets go up and down. That’s natural. This case study can help you understand why time in the market matters more than timing the market.
Imagine you invested $100,000 on January 1, 2008. That year, the markets went down. Your balance dropped to $64,388 in one year.1
Move money into a CD
What would've happened if you’d moved your money to a CD with a guaranteed 2% return
Stay in the market
What would've happened if you kept your money invested in the market
If you stayed in the market five years, it would have meant 74% more.2 The bottom line? Staying invested during volatility may pay off.
Market volatility is normal.
It’s more about time in the market than timing the market.
Diversifying your investment mix can help.
1 Example for illustrative purposes. Based on S&P Index returns as of December 31, 2007 through December 31, 2008.
2 Example for illustrative purposes. Returns related to a 2 percent interest-bearing CD. Market returns based on S&P index returns as of December 31, 2008 through December 31, 2013. Past performance does not guarantee future results.
The subject matter in this communication is educational only and provided with the understanding that Principal® is not rendering legal, accounting, investment advice or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, investment or accounting obligations and requirements.