Your most common questions about stock market volatility and retirement savings

History shows: Markets go up and down over time. But bigger swings may cause bigger worries for you. Plus, if there’s economic instability, you may also be concerned about job security or need a source of emergency cash.

We’re here to help with answers to the most common questions we get about stock market volatility and retirement goals.

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.

Generally, the plan will grant you a grace period to pay back the amount due or reduce the rollover amount. However, if you don’t pay back the loan amount, you’ll face tax penalties. Talk to your tax professional for more insights.

You cannot take a loan from an IRA but there are several exceptions that allow you to take a distribution from your IRA prior to age 59½ without a 10% early distribution penalty. Those include making a down payment on your first home, paying for higher education, and for certain birth and adoption expenses. (Taxes on the distribution may still apply.)

Additionally, you may be able take money out of your account and return it within 60 days as a rollover, and you will not have to pay taxes or penalties on the amount you put back into your IRA. You may do this once in a 12-month period for any IRA account.

If you have questions about how these exceptions or an early distribution could impact you, talk with a tax professional.

Most investment funds include everything from stocks to bonds, equities, and more. This diversification—called asset allocation—is a way to balance risk. You can choose your own asset allocation to balance your risk tolerance with your long-term goals. (Learn more about putting together your asset allocation.) Or, you can set up automatic rebalancing that aligns with your age, goals, and risk tolerance.

In general, the longer your time horizon, the less worried about market volatility you may have to be. For example, many people move to a less risky asset allocation the closer they get to retirement, which trades growth potential for stability. A financial professional can help review if your goals align with your risk tolerance.

Take a short risk assessment quiz (PDF) to see if you have the investment mix that best matches your risk tolerance.

In nearly every election, S&P 500 Index returns were positive.1 It’s another argument in favor of diversifying your portfolio, focusing on your long-term goals, and ignoring election noise.

Possibly; many annuities typically allow you to stop those at any time and resume when you'd like. Check with the issuer of your annuity for specific information.

Receiving regular payments from your annuity is important. Contact the issuer of your annuity to learn more about potential interruptions in your payments and options to help avoid delays.

Yes, typically you can, but it depends on the type of annuity you own. Many fixed, deferred annuities offer a free surrender amount each year if you’re still within the surrender-charge period. And some income annuities allow for a one-time withdrawal in addition to income payments. Keep in mind that additional withdrawals from your annuity can impact future earnings and future payments.

Variable annuities can be more complex. If you’re receiving guaranteed lifetime income payments, an extra withdrawal can change future payments. Contact your financial professional before taking a withdrawal from a fixed or variable annuity.

If you’re experiencing hardship, and your annuity is with Principal Life Insurance Company®, call us at 800-852-4450 to discuss your options.

A financial professional can help you plan and deal with the ups and downs of the market and update or create a personalized financial plan. We can help you find a financial professional near you.

What’s next?

Have more questions? Our contact center can help. Use this form or call 800-986-3343.


Investing involves risk, including possible loss of principal.

Asset allocation and diversification do not ensure a profit or protect against a loss.

Equity investment options involve greater risk, including heightened volatility, than fixed-income investment options.

Fixed-income investments are subject to interest rate risk; as interest rates rise their value will decline.

Guarantees from annuity products are based on the claims-paying ability of the issuing insurance company.

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.​

Insurance products and plan administrative services provided through Principal Life Insurance Co. Securities offered through Principal Securities, Inc., 800-547-7754, member SIPC. Principal Life and Principal Securities are members of Principal Financial Group®, Des Moines, IA 50392.