Email FacebookTwitterMenu burgerClose thin

Here’s the Surprising Move to Make Amid Market Volatility


In times of relative economic turmoil, it may be natural to expect a lot of change to retirement savings patterns — perhaps to see people save less as they deal with more pressing needs. Others, restless at seeing losses, may be eager to change their asset allocation amid other emotional responses to the downturn.

But the best move may be a lot simpler: doing nothing.

And so far, American retirement savers are luckily reacting to the current market volatility and inflationary atmosphere by largely staying the course, according to a recent study from the Investment Company Institute. This is good news for the retirement industry and for savers, who will likely be happy they didn’t react out of fear decades from now when they are withdrawing their money.

For help managing your own retirement savings plan, consider working with a financial advisor.

Retirement Plan Study Findings

retirement savings steady ici

ICI looked at data for more than 40 million defined contribution plans, focusing on the first half of 2022. The highlight of the data is that in general, people aren’t panicking and putting less into their retirement savings plans.

“Defined contribution plan participants generally stayed the course with ongoing contributions, and withdrawal activity remained low in the first half of 2022,” said Sarah Holden, ICI senior director of retirement and investor research, in a release. “Plan participants held steady with their asset allocations despite stock values generally declining in the period.”

Furthermore, only 1.6% of participants completely stopped putting money into their DC plans, lower than in the previous three years.

Not only did workers continue to contribute to their 401(k) and other defined contribution retirement plans, but most also didn’t even move money out of the stock market and into less risky investments. Only 6.6% of plan participants changed their asset allocation in the first half of this year, which is actually a smaller percentage than the first half of each of the previous three years.

Another good sign — withdrawal activity remained low. Only 2.9% of DC plan participants took a withdrawal in the first half of 2022, more or less consistent with the past few years. Hardship withdrawals also remained low, just 1.6%, up only slightly from 1.1% in 2021.

The Bottom Line

retirement savings steady ici

Retirement plan savers are continuing to save at similar rates as in previous years, despite a seemingly difficult economy and high inflation rates that could have caused people to move money from savings in order to deal with more pressing matters. Withdrawals are low, and most people are even keeping their asset allocation in place rather than moving money from the stock market into less risky options. All in all, staying is the right course in these uncertain times.

Retirement Planning Tips

  • Need drawing up the best retirement plan strategy for you? Consider working with a financial advisor. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • If you don’t have access to a 401(k) or other workplace retirement plan, you still have options. You can open an individual retirement account, either of the traditional or Roth variety.

Photo credit: ©, © Mitchell, ©