The stock market has been on quite a rollercoaster ride in recent weeks, with sharp fluctuations driven by uncertainty surrounding US tariff policies and leadership at the Federal Reserve.
When the market drops, so do our stomachs—and it can be particularly nervewracking to peek at 401(k) accounts during these moments of volatility. Already, many workers feel behind on saving for retirement, and are looking at a future where they’ll likely work later into their lives.
During moments of economic uncertainty, employers can point their workers toward financial education resources, connect them with advisors, and remind them of their investment options, financial experts tell HR Brew.
Participants stay put. When the stock market goes down, 401(k) participants’ natural inclination is to worry that they’re less prepared for retirement, said Marc Fowler, director of retirement education with Human Interest, which provides 401(k) plans for small and medium-sized businesses.
“People’s hard-earned money they’ve put away for retirement—they don’t like to see that balance go down. It’s that simple,” Fowler said. “There is so much uncertainty about how people will retire, and seeing that number head in a direction that isn’t where you would want it to go can be really challenging.”
Despite the anxieties many 401(k) participants are likely facing right now, data from investment management company Vanguard indicates most are not making impulsive decisions about their investments.
As of April 11, just 3% of Vanguard’s five million 401(k) participants had done an exchange—that is, moving money between funds—since the beginning of the year, according to David Stinnett, head of strategic retirement consulting. In addition, 401(k) loans and hardship withdrawals remained in line with 2024 levels, and 21% of participants had increased their savings rate, while most had left it unchanged.
This data reveals “a lot of resiliency and focus on the long term,” Stinnett said.
How HR can help. To support employees who might be worried about their retirement savings, HR can consider taking the following actions, Fowler and Stinnett told HR Brew:
Remind workers of their plan design. Vanguard encourages benefits leaders to adopt “plan design best practices,” Stinnett said. To help participants weather moments of volatility, the company emphasizes offering a qualified default investment alternative, with target date funds whose investments are allocated based on the year a participant wants to retire.
Because these funds are diversified, with investments not only in US stocks, but also non-US stocks and bonds, they’re less exposed to the whims of the market, Stinnett explained.
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“The more you have people in a target retirement fund, and you remind them of that, you communicate around the virtues of broad asset allocation, that’s hugely helpful,” he said.
Offer financial wellness programs. Stinnett said he’s seen plan sponsors embrace the idea of “total financial wellness” by offering not only retirement accounts, but also debt management and emergency savings, to their employees.
If workers are concerned about debt or healthcare costs, for example, these anxieties can be an impediment to saving for retirement. With financial wellness offerings, such as emergency savings accounts, “those concerns go from being kind of vague and uncertain to more black and white and manageable,” Stinnett said.
Providing financial wellness education is one way to help workers become more confident about saving for retirement. A 2024 Human Interest survey found enrollment in employer-sponsored retirement plans was higher for employees who had access to such resources than among those who didn’t.
Even something as simple as a retirement calculator can be reassuring amid volatility, Fowler said. “People love to be able to play with the numbers and make their life work on paper, and that gives them confidence to then take forward.”
Connect employees with financial advisors. During moments of instability, it can be helpful for employees to speak with advisors, whether in an individual or group setting, Fowler added.
In recent years, providers like Vanguard have worked to make low-cost advice available to investors, whether in-person or digitally. According to Stinnett, this sort of offering “gives a coaching element to your retirement savings, which is intended to make people feel better during times of stress.”
MasterControl, a life science software company, has been offering employees one-on-one consultations with the same financial advisor for the last 15 years, said Alicia Garcia, chief people and culture officer. This advisor helps employees understand concepts like “dollar-cost averaging,” a strategy where retirement plan participants invest money on a regular schedule, regardless of how the stock market is performing.
Access to an advisor has made employees more confident about their retirement savings, Garcia said. “We don’t get a lot of questions now about, ‘My 401K has dropped, what do I do?’” she said. “Because I feel like we’ve done a really good job of educating everyone on market volatility.”