Worried about your 401(k) as stock market drops? Here's what you should do

SEATTLE — KIRO 7 News went to Capital One Investing in Seattle to ask an expert: What should you do about your 401(k) as the stock market drops?
 
"What we don't want to do here is react emotionally," said Garrett Silver, head of digital investing with Capital One Investing.
 
Those who sold in the Great Recession, he said, "missed out on years of really strong market performance."
 
Silver says this has been a tough year for the stock market so far. But, he says, reacting out of fear is the wrong way to invest.
 
"We don't recommend that investors react to the market," Silver added.
 
Silver says this is a good time to make sure your investments are set up the way you want.

Here's an example: If you're 30 years away from retirement, it's likely your 401(k) is invested in more stocks—stocks that happen to be going down this month.

And, for now, that's OK.
 
"Typically you're invested a lot more aggressively and you're going to see a lot more reaction to this type of market," said Silver.
 
If you're five years away from retirement, your 401(k) should be invested more conservatively -- and you shouldn't see huge swings.

It's important to check and make sure your investments are set up the way you want. Silver recommends you stay engaged in your 401(k), especially closer to retirement.
 
We asked people how they are feeling, given the recent market volatility.
 
"Watching the stock market. Yeah I have a 401(k). And it's taken a pretty hard hit lately," said Larry Arentson, who is worried about his 401(k).
 
"It's pretty tough to watch. Because retirement's only about four to five years away," added Arentson.
 
A survey by The American College of Financial Services show more than 60 percent of financial services clients are concerned about recent market volatility.

Experts say the volatility is a "real risk" to retirement security -- but this is not a time to over-react.

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