Average 401(k) balances are down more than 20% this year. Here’s what experts say you need to do to survive in a volatile market

Saving for retirement is one of the most important financial obligations, but the journey from zero balance to a comfortable savings to live off of your later years isn’t always linear. According to the latest data from Fidelity, the average 401(k) balance fell for the third straight quarter and is now down nearly 23% from a year ago to $97,200. Some of the main culprits? A rising rate of inflation and huge fluctuations in the stock market.

“Many 401(k) account balances are down because the largest asset classes (stocks and bonds) are in double digits this year,” says Herman (Tommy) Thompson, Jr., a certified financial planner with Innovative Financial Group. “Furthermore, economic difficulties, including rising inflation and job cuts, have forced some participants to take loans and distributions at the worst possible time – when markets are falling.”

The Dos and Don’ts of Investing in a Volatile Market

So how should you handle the swings that could affect your retirement savings balance? Here’s what the experts recommend:

  1. Stay strong and keep saving. Yes—even when things are rough, you should keep saving for retirement, and most savers take that into account. According to Fidelity, the average 401(k) contribution rate, including employer and employee contributions, held strong at 13.9%. In fact, the majority of employees (86%) kept their savings account contributions unchanged and 7.8% actually increased their contribution rate.

    Investing in your 401(k) is a form of dollar cost averaging, which is an investment strategy that requires you to invest the same amount at set intervals, no matter what. One of the major advantages: this approach removes the emotion of investing and ensures that you don’t make sudden moves that could cost you even more. “It’s best not to panic in short-term weakness: it gives the long-term investor the opportunity to invest future contributions at lower prices,” says Karl Farmer, CFA, Vice President and Portfolio Manager at Rockland Trust. Another benefit of staying the course: employer contributions By continuing to invest consistently over time, you can be sure to benefit from employer contributions and grow your balance.

  1. Don’t borrow money from your 401(k). If you can help it, you should try to avoid borrowing from your 401(k). While only 2.4% of savers started a new loan in the third quarter, significant changes to your balance or changes in your financial situation in a tough economic climate could make you consider tapping into your 401(k) funds. Most experts would agree that this is not the wisest long-term plan. Borrowing from your future self comes with its own set of risks, including taxes, penalties, high interest rates, and missing out on the potential growth you’d see if you left your money alone.

  2. Avoid making impulsive changes to your asset mix. You may want to hold off on making major changes to the mix of assets you invest in. “Managing retirement plan savings like 401(k) accounts should be done with a long-term view,” says Thompson. “De-risking after your portfolio has already suffered a double-digit decline usually results in not having enough risk in the portfolio when the markets recover.”

The takeaway

If your investments are making you uncomfortable, take a break. Adjusting to short-term, day-to-day market fluctuations could lead you to act impulsively and make a move you’ll regret later. Continue to save for retirement and review your portfolio periodically to track your progress.

“At least annually or in volatile markets, investors should review their allocations to make sure they’re still aligned with their goals,” Farmer says. “For example, many investors in the spring of 2020 had the opportunity to reduce exposure to bond funds and add back diluted equity allocations. Rebalancing should be done at least annually.”

This story was originally featured on Fortune.com

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