I’m Worried the Markets Will Tank My Savings. What Should I Do?

Volatility is unsettling, but it’s also normal. These steps can help calm your jitters

Anne Lester,

AARP

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Published May 19, 2026

a person on a see saw with money on the other end

Seesawing stock prices can be unsettling, but they don’t have to disrupt your retirement plan.

Kyle Ellingson

Key takeaways

Market swings are normal, and panic-selling during scary news cycles can do real damage to your nest egg.
Align your allocation of stocks, bonds and cash to when you expect to need the money, and to your comfort with risk.
Rebalance your portfolio regularly as you near retirement, and reassess risk.

Let’s face it: Sometimes the markets get jumpy. Causes vary — maybe it’s headlines about inflation, geopolitical tensions or the latest technological disruption that’s going to change everything. But the questions among retirement savers are always the same: Should I be doing something? Right now?

However strong the markets have been, and for however long, people start wondering if the other shoe is about to drop. It can feel unsettling, especially if your nest egg is tied to those ups and downs.

But before you make any big moves — like, say, fire-selling stocks because of a scary news cycle — take a step back. Market volatility is uncomfortable, but it’s also normal. Dealing with it is less about what you should do than whether your portfolio is set up to support your goals and your schedule. Here’s my checklist for calming your jitters.

Consider your time horizon

The first thing to consider is how soon you’ll need that money. The closer you are to retirement, the less risk you generally want to take with your nest egg, because your savings have less time to recover from a market shock.

For example, money you’ve set aside for emergencies, or for a purchase you plan to make in the next few years, shouldn’t be in the stock market. That kind of money belongs in something stable, like a high-yield savings account. You don’t want to risk the market dropping 10 or 20 percent right before you need it.

With a longer time horizon, your savings can withstand more ups and downs. If retirement is still decades away, or even just 5 or 10 years, those temporary swings become less important. Time gives investments room to rebound.

Sync savings to risk tolerance

Here’s a bit of finance industry jargon that can help you think this through: “right-risking.” It means matching the level of risk in your portfolio — the ratio of stocks, which can be volatile, to more stable investments like bonds and cash — to your time horizon and your personal comfort level.

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For younger investors with many years of working ahead of them, it makes sense to allocate a larger share of savings to equities, such as stock mutual funds and exchange-traded funds (ETFs) that invest in the S&P 500. Even if the markets lurch now and then, over time they’ll provide the biggest return.

As people get older, they typically reduce stock exposure to preserve what they’ve built up for retirement. One rule of thumb — a guideline, really — is to base the percentage of stocks in your portfolio on 100 minus your age.

If you’re over 50 and your entire portfolio is invested in equities, you may have more risk than you’re comfortable with. That doesn’t mean abandoning the market altogether. It may simply mean adjusting your mix so the ride feels manageable.

Accept that you won’t get everything right

Investing requires swallowing a difficult truth: Sometimes you’re going to get it wrong.

When one investment soars and another sours, it’s tempting to think you should have put all your money in the winner, and to make fewer but bigger bets going forward. The reason planners preach diversification, the strategy of owning different types of investments, is that we can’t reliably predict those winners ahead of time.

In a diverse portfolio, some investments will inevitably underperform. That’s a feature, not a bug: You’re spreading your risk across different assets so that one disappointment doesn’t derail your entire plan.

Don’t overreact to headlines

Another challenge investors face today is the constant stream of financial news and commentary. Social media, podcasts and cable news traffic in attention, and stoking anxiety is one of the most effective ways to get it. It can start to feel like a catastrophe is always just around the corner.

The reality is that markets have weathered countless crises over the years — recessions, wars, political upheavals — and have continued to grow. Volatility happens, but reacting emotionally to every headline usually leads investors astray.

Rebalancing is healthy

Over time, strong markets can cause your portfolio to drift away from its intended balance. Sticking with stocks because they’re doing well may leave you with more risk than you’d originally planned. Periods of volatility can provide a helpful reminder to check in on your portfolio and adjust the allocations as you reassess risk.

One simple habit is to review your asset allocation every year or two. Many people choose a specific date to do this, such as their birthday. The point isn’t predicting where markets will go next; it’s maintaining the structure you already decided was appropriate for your goals. In that sense, it’s more maintenance than market timing.

Losing sleep is a sign

If market swings are causing you serious anxiety, that’s valuable information. It might mean you’re taking more risk than you’re comfortable with, something many investors discover during periods of volatility. Suddenly the abstract idea of risk becomes very real.

Making a modest adjustment to your allocation may help restore the peace of mind you need to stay invested for the long term. The key issue is why you’re making the change. Tweaking your portfolio when it no longer aligns with your risk tolerance is thoughtful planning. Panic-selling is something else.

History offers a helpful perspective here. Balanced portfolios, those that combine stocks and bonds, will periodically produce short-term declines, but they’ve historically produced solid returns over longer periods of time. Measured in years instead of news cycles, markets have generally rewarded patience. The most powerful response to a stumble may simply be staying the course.

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The key takeaways were created with the assistance of generative AI. An AARP editor reviewed and refined the content for accuracy and clarity.

Award-winning retirement savings expert Anne Lester is the former head of retirement solutions at J.P. Morgan Asset Management and the author of Your Best Financial Life: Save Smart Now for the Future You Want. You can follow her on Instagram and YouTube @savesmartwanne.