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How to React to Market Volatility

May 02, 2022

As market volatility persists and speculation of a coming recession gains a louder voice (nobody knows the future…), it’s important to avoid getting pulled into the hype and emotions of the 24 hour news media. 

I’ve blogged in the past on keeping emotions (as much as possible) out of investing decisions when it comes to retirement savings, but never from the perspective of different age ranges.  Here are some thoughts that you should have regarding what the stock markets is doing, and how you should react to it, solely based on age.


40 and Under

Apathy.  It may sound reckless that you would just not care about your retirement savings, but that’s not what I mean.  Your sole focus, when you’re 40 and under, should be what you can control.  And what you can control is the amount you’re saving for future retirement.  You should not be concerned with what is happening in the day to day markets when retirement is decades away.  You will see market ups and downs, but this should never sway you away from saving for retirement, which is the most important part of your planning at this point.  Your only focus should be ensuring your savings rate is sufficient while still having the power of compounding interest on your side.  When the market is down (if you’re even paying attention to it), instead of being worried, you should be happy to know that your future contributions will be invested at a lower price (buying on sale).

40s Through 50s

Many in this age range could certainly benefit from the above advice.  But for others, realizing that retirement is not far off, it makes sense to consider your overall comfortability with risk (click here for a recent blog on this). 

Once you’re in your 50s, retirement planning should focus on managing risk while staying on track to achieve desired retirement savings goals.  If you haven’t prioritized saving up to this point, you may need to rely heavily on stock market growth potential to help you reach your retirement goal, while someone who has been diligent in saving, may be ahead of their goals and can afford to reduce their overall risk.

5 Years Until Retirement Through Retirement

There is no more important time to be paying attention to market volatility and the impact it can have on your savings, than the 5 years before retirement and the first 5 years of retirement.  Being exposed to a significant downturn in the stock market can lead to changing your retirement goals, which could include delaying retiring, living off less income in retirement, or relying heavily on the stock market to recover from losses. 

Successful retirement planning considers market volatility by ensuring retirement income sources are protected from stock market losses, while at the same time, ensuring there are sufficient assets allocated to stocks for the long term for any future growth potential.

If you’re unsure you’re on the right track, check out some of my other blogs, or feel free to contact me at or 716-707-1818.