Worries for 401(k) plans

With the new tariffs announced and the stock market fluctuations, many people say they are worried about their 401(k) plans. Should they be worried, and what should they do about it?

Jay Spector, Co-CEO and Partner of EverVest Financial, joined us on “Arizona Horizon” to talk about these new worries and more.

“It’s an employer-sponsored retirement plan that many of your viewers might have at their places of work. If they’re in the public sector, it might be called a 457 account, or if they’re a school teacher, it might be called a 403(B) account, but they do all the same thing for the investor: They let them save for retirement, pretax or post-tax, through a Roth component,” Spector said.

Spector said it depends on what the investor is investing in, regarding volatility. Some funds he listed were stock mutual funds, bond mutual funds, money market funds and alternative investment funds. Now, with tariffs and turmoil affecting U.S. citizens, investors are concerned for the safety of those funds in the future, according to Spector.

“People are still investing in the stock market. You have seen on the average retail investor an increase in flows to a lot of major exchange-traded funds and funds that are out there. So I don’t believe the retail investor has left the stock market or is leaving the stock market. They’re being a little more cautious,” Spector said.

People with treasury bonds are more concerned because of the risk of being affected by the tariffs, according to Spector. Therefore, uncertainty plays a harmful role with investors because there is constant movement in the stock market.

“At or near retirement, folks need to take an inventory of what their risk is, what they’re comfortable of taking in terms of risk. They should also focus on dividend and interest-bearing investments so that you can use that dividend and interest to smooth out the volatility in the market,” Spector said.

His advice to people with retirement in mind is to “stay the course because you cannot time the market.” The same concept goes toward 401(k)s. Spector encouraged people to stay on your current investment plan.