Whether you consider what’s happened to the stock market in recent days a selloff, a correction or a crash, the best reaction is probably the same: Stop and take a step back.
Getting some perspective in times like these can stave off panic, and thus any rash financial decisions. The latest quarterly retirement account numbers from Fidelity Investments can help in this regard.
The company, which has more than $6 trillion in customer assets, reports that the average balances in its customers’ 401(k) accounts and individual retirement accounts recently surpassed six figures for the first time. As of the end of 2017, the average 401(k) balance was $104,300 and the average IRA balance was $106,000.
It’s safe to say those averages have fallen since then, perhaps back below the $100,000 mark. If you take a step back, however, you can see how far the average retirement account has come in recent years.
For example, Fidelity reports that average balances in customer IRAs at the end of the last three years were:
- 2017: $106,000
- 2016: $93,700
- 2015: $90,100
In fact, go back to the end of 2011 — less than seven full years ago — and the average balance was a mere $69,400.
As Kevin Barry, president of workplace investing at Fidelity, puts it:
“… it’s important for individuals to remember that saving for retirement is a marathon, not a sprint, and that applying a long-term approach to retirement savings strategy helps to put investors in a better position to reach their savings goals.”
It’s also worth noting that Fidelity attributed its customers’ latest average balances not only to stock market gains but also to customers increasing contributions to their retirement accounts.
Of course, this is not to say you should sit tight and take no action whatsoever. Just make sure you gain some panic-squelching perspective — and read Money Talks News founder Stacy Johnson’s wisdom on the current market — before taking action.
How do you keep yourself from panicking and making poor money decisions when the stock market is sliding? Share with us by commenting below or on Facebook.