Although the market doesn’t fluctuant as much as we think, there certainly are ups and downs. Earlier in 2024, market downturns, including sharp drops in the Dow, S&P 500, and Nasdaq, along with a rise in unemployment, raised concerns for retirement plan participants who feared their savings were impacted.

Advisors and other financial experts emphasize that staying focused on long-term strategies and resisting panic-driven decisions will avoid missed market recoveries. However, that is easier said than done when it comes to our retirement savings.

Plan sponsors can play a role in ensuring participants are educated and feel prepared with plenty of resources. Several experts in the field provided key strategies for communicating with participants.

• Education and Resources: Encourage participants to utilize financial advice and educational materials.
• Long-Term Focus: Remind participants of their retirement goals and the importance of maintaining appropriate risk profiles.
• Plan Features: Tools like managed accounts and auto-rebalancing help participants maintain portfolio stability and discipline during volatility.
• Proactive Communication: Utilize tested communication strategies to reassure participants and promote long-term thinking.

Behavioral economist Shlomo Benartzi stresses the value of preventive measures and clear messaging to reduce panic and encourage consistent investment strategies. “I truly believe that we should, as an industry, plan ongoing communications that actually foster long-term thinking … and set the panic-management system ahead of time so that you know when the market drops, which messages you can send and test,” Benartzi says.

Read more about these strategies here: PlanSponsor.com