Should I Stop or Increase My 401(k) Contributions Right Now?

With recent market volatility and general uncertainty caused by the COVID-19 virus, we’ve received a lot of questions from people asking…

Should I stop or increase my 401(k) contributions right now?

I’m losing a lot of money, I’m seeing my balance go down. Should I go to cash? Should I get more conservative?

Should I stop my deferral or reduce the amount that I’m putting into my 401k?

If you’re like millions of Americans with 401(k)s, chances are you’re wondering the same thing. 

These are all great questions to ask. 

For years, you’ve been watching this bull market and watching your account values rise.

And now we have this bear market (this is the 12th one since 1945), and bear markets are usually started by something that comes out of nowhere. 

We’re experiencing this now with the global health crisis surrounding COVID-19. 

The economy was strong, unemployment was at historical levels, companies were doing extremely well, and then suddenly it all stopped. 

Bear markets can be scary. They cause panic, fear, and a lot of uncertainty. 

While things are uncertain right now, there is a silver lining in all of this: 

Should I stop or increase my 401(k) contributions

If you’re wondering, Should I stop or increase my 401(k) contributions right now, you want to check out this video before you make a move. 

In it, Mark Sorensen, Chief Investment Officer at 401(k) Maneuver, explains what’s happening in the markets, why you should be patient, and why–contrary to what the news will tell you–you should be excited.

Check out the video & make sure you watch until the very end

Key takeaways from the video

  • Stock markets go up, they come down, but, generally over time, they will go higher. These periods of time, where the market acts like it has in the last few weeks, are relatively rare and, again, they have always come back. So be patient. 
  • No one knows how long it’s going to be before this bear market recovers. However, the average bear market has recovered in 24 months.
  • Event-driven bear markets, like this one we’re experiencing right now, means this wasn’t a structural problem. It wasn’t a financial problem. It is a healthcare crisis, and it’s a transitory event. It will end at some point in time. Trust the American ingenuity, the American spirit. We will get through this, and the economy should begin to recover.
  • Sometimes the best thing to do is nothing, and just know that patience will be rewarded over time. 
  • There is reason to believe, though there are no guarantees, that this bear market could recover much more quickly because we came from a point of economic promise. The economy fundamentally was doing terrific, and then we got blindsided by this health crisis. However, because we had such a quick downturn–historically, the quicker the downturn, oftentimes, the quicker the recovery. Again, only time will tell how this all plays out. 

If you have questions about your 401(k) or if you need help, we’re
here for you. Click below to book a complimentary 15-minute call
with one of our advisors. 


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401(k) Maneuver™ is offered by Royal Fund Management, LLC, which is registered as an investment adviser with the SEC and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the adviser has attained a particular level of skill or ability. Royal Fund Management, LLC, is not affiliated with or endorsed by NASDAQ.

All investment strategies have the potential for profit or loss. Changes in investment strategies, contributions or withdrawals, and economic conditions may materially alter the performance of your portfolio. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will be suitable or profitable for a client's investment portfolio. There are no assurances that a client’s portfolio will match or outperform any particular benchmark. Asset allocation and diversification do not ensure or guarantee better performance and cannot eliminate the risk of investment losses. Projections are based on assumptions that may not come to pass.

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