So you're watching the stock market drop and your 401(k) doesn't look great. What do you do? First step: Don't panic.
How can investors protect their 401 and other retirement savings from being depleted when they’re watching the stock market drop?
See: ‘Moment of silence for every boomer’s 401k’ — internet erupts with gallows humor as market crumbles Here are a few ways you can protect your 401, according to financial advisers — some suggestions have little to do with the account itself. Cash is, at times, king “You can always look at cash as being ‘safe,’” said Thomas Rindahl, a financial adviser at TruWest Wealth Management Services in Phoenix. Along with contributing to a 401, workers nearing retirement should keep some money outside of the market. Some investors may feel compelled to buy as much in stocks as they can while prices are down, but they also need to set some cash aside for emergency funds, as well as a pile they could draw down if they do retire soon.
Ask your adviser about these investment ‘tools’ Annuities, which are insurance products, are another way to provide protection of principal, as well as generate guaranteed income, Rindahl said.
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