[Music] High inflation and fears of a recession Have many americans wondering what to do With their 401k retirement investments i Am one of those people and those fears Have been done exactly who isn't these Days well those fears have only been Magnified because the u.s stock market Is in bear territory and that means Stocks have fallen at least 20 from Their most recent peak in january Cbs news money watch reporter amy Says quote younger investors who've Never experienced such a decline and Older investors who are closer to Retirement might be tempted to bail or Switch strategies And amy peki joins us now thank you so Much for being here amy we've been kind Of just talking amongst ourselves and Debating this and it's really unclear What to do everyone says look don't Worry about the stock market it's a Long-term investment just breathe Meanwhile we're watching our retirement Savings dwindle the folks who do have This what is the best advice for those On the fence at this point Yeah well i've been talking with experts About this and it's really important to Remember that investing is partly about Psychology And you know partly you need to remember That um there's a lot of research in how
Your behavior can influence your stock Market returns or your 401k returns for Instance behavioral economists have Found that the more you check your 401k Balance the lower your long term return Will be and that's because of psychology You know you're looking at your 401k You're getting freaked out maybe you Decide to sell Right at the time when you shouldn't Sell you have to remember that market Timing isn't a possibility that's Basically like saying you can guess the Future so one thing that Experts say is you know don't check Every day Keep your long-term goals in mind and Remember that you know bear markets are Actually fairly common and you know they The markets always come out of those Bear markets so keep that long-term view In mind you know the other thing that is Happening right now is impacting Investors is not only the stock market Volatility but inflation we have the Hottest inflation in 40 years and that's Causing uh some investors to actually Stop investing in their 401ks schwab did A new study on people who have 401ks and They found that 15 of people with 401ks Are reducing their contributions due to Inflation now it's really hard when You're trying to make a choice between Your groceries today and your long-term
Retirement outlook but invest experts Say it's best if you can again keep that Long-term view um avoid cutting your Contributions um because you're putting Your long-term financial health at risk So you know along those lines you know Talk to an advisor a lot of corporate 401k programs offer advisors that you Can talk with uh keep that long-term View in mind and don't check your 401k Every day that is fascinating the more You check it the lower it's likely to be Literally wrote this down don't check Every day But here's another thing okay amy you Got to make me smarter on this your Article discussed This number drumroll please 1.7 Million dollars Being the sweet spot of how much many Americans need to put away 1.7 million Dollars just trying to afford groceries And gas That's not realistic right is there a Gap between what americans say they want To save and what they're actually Putting away i mean i just hear that Number and i go what Yeah i mean i i think that's a really Good point they're asking people how Much do you think you need in retirement And they're saying 1.7 million um but if You look at the numbers most american How americans have much less than that
Saved actually the average 401k Has about 140 dollars saved in it so That that's a huge difference between What people say they need and what they Actually have Um even people close to retirement have About two hundred fifty thousand dollars Saved and that's again a huge gap um but You they schwa this came from schwab and Schwab also asked how likely are you to Get to 1.7 million dollars and only About half of people said they're likely To get there so even though americans Say this is what they like the muslim Realize they're not going to get there And that underscores the retirement gap In america That you know most people Realize they need a certain amount but They're probably not going to get there And this survey doesn't even include the One quarter of americans with no Retirement savings at all um you know Most of those people end up living on Social security and maybe some other um Income like maybe working part-time or Retirement But you know i talked with experts about This like this might seem hard for most People to reach um but they said look You know start small start saving Especially if you're young you have Compound interest that's going to help You over time
And you might be surprised by the time You get to retirement how much you've Saved You're so right compound interest two Important words amy we really appreciate It thank you Thanks for having me on
