Economic volatility across global markets can take a toll on both your financial and mental health. In the midst of a pandemic, political crises, inflation, rising interest rates, and a challenging business climate, investing has been quite a roller-coaster ride in recent years. This can be a cause of concern for people of all ages—especially those who are approaching or already in retirement.

As the markets continue to rise and fall, here are six tips to help you keep a positive outlook on your retirement savings through times of volatility.

1 Don’t panic, and stay the course

It’s never enjoyable to see your retirement savings—or any savings—drop in value, but it’s important to take as much of the emotion out of your investment thinking as possible. Fear of missing out may prompt you to invest more at the high point in the market, while fear of losses could prompt you to sell when markets dip.

Retirement investing can be an emotional roller coaster

Market volatility may lead to untimely investment moves

For illustrative purposes only. There is no guarantee that any investment strategy will achieve its objectives.

There are a few potential problems with this kind of thinking. For instance, if you continue investing when prices are low, you could position yourself for potential gains when the market recovers and the price of shares goes up. But if you withdraw money or move it to a low-earning cash investment, it can be hard to make up lost ground. During times of market recovery, it’s quite possible for returns to shift suddenly from negative or flat to positive without any notice. Depending on how much you’ve saved, even a 4% or 5% bounce back could be worth thousands of dollars in your portfolio.

By focusing on the fundamentals and avoiding panic selling, you may be better equipped to weather market volatility.

2 Review your sources of retirement income

In retirement, there are five main sources of income:

1 The savings in your workplace retirement account

2 IRAs, annuities, and other personal retirement savings

3 Social Security or other government benefits

4 Any pensions you might have

5 Part-time work

If you’re approaching retirement, it’s important to review all your potential income sources and where to draw from first. Social Security, pensions, and annuities may help establish a steady flow of cash—although it’s important to carefully consider decisions about when your benefits will start, how long they’ll last, and if your partner will continue getting your benefits when you pass on.

Once you’re on top of how these payouts will work, you can factor in how to withdraw your retirement savings¹ to help provide the additional income you need—while making sure that your money lasts as long as you need it to.

3 Consider the best time to retire

Do you have the option of working for a few more years? If so, you may want to consider doing so.

Whether you just want to spend a few more years working at a job you love or want a few more years to contribute to your nest egg before you start withdrawing from it, delaying or phasing into retirement may be a helpful strategy.

• You’ll continue to be eligible for your full workplace retirement plan contribution, plus additional catch-up contributions.
• You can go on contributing to an IRA if you’re earning income.
• If you delay starting Social Security payments, your potential retirement benefit can grow each year until you reach age 70.
• Your potential pension benefits may also increase based on your years of service, earnings, and age when you start taking your benefit.

4 Consider diversifying your investments

Your retirement savings may need to last you a long time—20 years, 30 years—maybe more. That’s why it’s important to consider if a diversified portfolio may be right for you.

Owning funds made up of stocks can expose you to volatility. But thoughtful asset allocation (owning an appropriate portion of equities based on your particular age) and diversification (owning stocks from various types of companies) may continue to help with potential losses and possibly create opportunities for compound growth over the long term.²

Talking to a financial professional about managing risk, remaining open to growth, and how to handle the ups and downs of the markets can also help.

5 Think about a drawdown strategy

A drawdown strategy is a predetermined approach to withdrawing your savings in retirement. The idea is to help you meet your projected needs while also making your money last. Among the possible strategies available are:

• Taking only interest and dividends from your retirement portfolio
• Segmenting out your investments to make cash available at various times in the future
• Withdrawing the same amount each year with adjustments for inflation

A good place to start is to estimate your future projected expenses with our retirement planner tool. The basic projection is all done for you, and you can adjust it if you’d like.

A financial professional’s perspective may also be helpful when considering how to access your retirement savings.

1 Ordinary income taxes are due on withdrawal. Withdrawals before the age of 59½ may be subject to an early distribution penalty of 10%.

For complete information about a particular investment option, please read the fund prospectus. You should carefully consider the objectives, risks, charges, and expenses before investing. The prospectus contains this and other important information about the investment option and investment company.  Please read the prospectus carefully before you invest or send money. Prospectuses may only be available in English.