Stop Freaking Out About Your Retirement Account (And Start Doing This)

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The article below was written by The Water Coolest’s editorial team. The Water Coolest is a daily business news and financial advice email newsletter … with a hearty helping of unfiltered commentary (see below).

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Stop refreshing your retirement account dashboard.

Keeping an eye on your retirement account right now is an exercise in futility. Besides, you’ve got enough stuff to worry about (like an impending coronavirus apocalypse) instead of considering whether you can still afford Del Boca Vista.

It’s times like these when people try to do their best Wolf of Wall Street and outsmart the markets. Here’s a hint: you won’t.

How do I know? Because even the guys with a degree from Harvard and insider information can’t outsmart the markets right now. Exhibit A: the stock market indexes.

When markets plummet, it’s human nature to sell everything we have, put it under a mattress and prepare to go all “I am Legend.” But if history has taught us anything, it’s that markets will eventually get off the mat and live to fight another day.

Just look at the S&P 500 chart below. It tracks market growth since 1980…

You might notice quite a few dodges, ducks, dips, dives, and dodges. Note, the especially piss poor performance following 9/11 and the 2008 mortgage crisis. And the coronavirus dip is already shaping up to be more devastating than both of those market selloffs.

Of course, that doesn’t mean that’s all she wrote. The fat lady will eventually sing and we can go back to worrying about things like “what will Elon tweet today.”

But until then here’s what you can do to survive this downturn (and every other downturn). First, let’s start off with what you shouldn’t do…

Don’t freak the fuck out. Letting your emotions get the best of you at a time like this is one of the worst things you can do. Making rash decisions now is like staying out past 2 AM… nothing good is going to come of it.

Don’t sell to “cut your losses.” This has proven to be a worse strategy than fighting coronavirus with cocaine and Tito’s vodka. Seriously, it’s science (economics is a science, right?).

Don’t cash out. If you’re looking to build a doomsday shelter, don’t pull cash out of your retirement accounts. Seriously, find another way to fund it. IRAs and 401ks are subject to age-restrictions and pulling out money early can trigger massive fees and taxes.

And he’s what you can do…

Do remember “What’s my age again?” Keep in mind that if you aren’t planning to retire in the next few years you’ve got plenty (or, at the very least, some) time to recoup losses and then some.

Do consider buying. The good news about a market rout? Stocks are available at bargain-basement prices. This, of course, isn’t for the faint of heart but could provide an opportunity to add to your portfolio.

Do ask a pro. If this blog and a hearty helping of Xanax doesn’t calm your nerves, turn to an expert. There are a lot of people smarter than us out there that will help you weather this storm.

 

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