Managing Your Workplace Retirement
Plan in Volatile Times

By Ziyah Esbenshade, CFP®, APMA®, CRPC®

Investment markets are in a challenging period in which large swaths of the stock and bond market have lost value. You may have noticed the impact of this on your own workplace retirement savings plans, such as 401(k) or 403(b) accounts.


While watching the value of your portfolio drop is never easy, investors must understand that markets can be volatile over short periods. Variable investments like stocks and bonds don’t move in a straight line – and occasional cooldowns are inevitable. It’s also worth remembering that if you’ve been investing in your workplace retirement plan for some time, it’s likely you benefited from strong markets in the historic bull run that followed the 2008 recession. Here is some more perspective to keep in mind:


Sticking with the plan — It isn’t unusual to question your investment strategy when markets aren’t working in your favor. Consider the two key reasons why you shouldn’t be concerned by volatile, short-term, market performance in your retirement account:


1. You are investing for the long term. Your concern is less about what the markets do today and tomorrow than how your investments perform between now and the time you retire. If you have a long time horizon before retirement and faith in the quality of your investment choices, you should be able to ride out the short-term market swings.


2. You are investing regularly over time. Periods of market volatility can work in your favor. When investments drop in price, you are able to purchase more shares than you would have at a more elevated price. Assuming the investment recovers and grows over time, that can be beneficial to your ultimate investment returns. This is an advantage of making regular investments on a systematic basis.


For these reasons, it makes sense to be persistent with your regular payroll deductions that are directed into your retirement savings, and let markets recover so your portfolio is in a position to bounce back.


Changes to consider — Should you be content to stand pat with your portfolio regardless of the market’s performance? In many cases, yes. However, there are several potential actions to consider in light of recent market performance:


1. If you’re closing in on using your assets to create an income stream in retirement, (within three years or less), it may make sense to scale back the level of risk in your portfolio mix. That could mean shifting some assets into fixed-income investments and taking some money out of your equity investments.


2. If you feel any of your investments have been less productive than they should be for an extended period, you may want to consider repositioning some assets.


3. It may be an opportune time to boost the amount of money you set aside for retirement. If you haven’t regularly raised your contribution level, consider doing so now. For those age 50 and older, you can take advantage of catch-up contributions of up to $7,500 to your workplace retirement account.


Talk to your advisor — It’s important that the investment strategy you pursue in your workplace plan be consistent with your overall financial goals. Now is a good time to sit down with your advisor to determine if you’re saving enough for retirement and if the investments in your retirement account are working most effectively for you.



Ziyah Esbenshade, CFP®, APMA®, CRPC®, is a Private Wealth Advisor and Senior Vice President with Pell Wealth Partners, private wealth advisory practice of Ameriprise Financial Services, LLC in Rye Brook, New York. She specializes in fee-based financial planning and asset management strategies and has been in practice for 20 years. To contact her, visit, call 914.253.8800 or visit our office at 800 Westchester Avenue, Suite 300, Rye Brook, New York 10573.