HTLF Retirement Plan Services
Communicating Through Volatility

You’re not the only one concerned about your retirement plan; participants worry during difficult times, too.

In recent weeks, we’ve experienced some of the most impressive swings ever in the U.S. stock market. Naturally, this kind of rollercoaster ride causes participants concern. It’s more important than ever during times of volatility to remind them of the reasons to participate in their 401(k) plan, as well as the factors that went into their plan investment decisions.

Here are two key reminders to share with participants that could help them alleviate their fears. Doing so may be a critical factor in their long-term financial well-being.

Reminder: Stay in

If at all possible, participants should probably continue investing in the plan. It’s likely that some have already stopped participating or even taken hardship withdrawals. It’s also likely that some wake up every morning wondering if they should take their money and run. Reminding those participants that in most cases the plan is the best means to save for the long-term could be helpful. As you provide information about any changes to the plan’s rules about accessing their money, be sure to include messaging about the benefits of staying in the plan. One great benefit, even in the depths of a bear market, is the ability to invest at what may be deep discounts. By continuing regular periodic investments, participants potentially have the opportunity to purchase funds at what may turn out to be “bargain” prices.

Reminder: Stay invested

Any time your investment value drops, it is tempting to move everything into cash. It’s true that no one really knows what the markets will do tomorrow. That’s why focusing on strategy rather than current balances may save participants from big mistakes. Young participants should be congratulated for starting on the journey, and reminded that they have time to recover from market declines. Older participants — at least those who paid attention to lessons from the past — have hopefully moved away from riskier investments, thus insulating themselves somewhat against market swings. All should be reminded that continuing regular investments in the plan, if possible, is a wise course.

Make your message easily understood

The basics of good communication are particularly important when times are challenging. Communicate clearly, using words that are simple and easily understood. Use real-life, personal examples when you can. Include graphics that emphasize and clarify the point you’re making. Highlight the main points with color, font size, symbols, or other creative means. Sum up with key action points or takeaways.

Communicating with plan participants becomes all the more important when things go off-track. Take a measured, thoughtful approach, remembering that participants need to hear the truth as well as empathy from their employer.

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Heartland Retirement Plan Services are offered through Dubuque Bank and Trust Company. The information provided herein is general in nature and is not intended to be nor should be construed as specific investment, legal or tax advice. The factual information has been obtained from sources believed to be reliable, but is not guaranteed as to accuracy or completeness. Heartland Retirement Plan Services makes no warranties with regard to the information or results obtained by its use and disclaims any liability arising out of your use of, or reliance on, it. Products offered through Heartland Retirement Plan Services are not FDIC insured, are not bank guaranteed and may lose value, unless otherwise noted.

Kmotion, Inc., 412 Beavercreek Road, Suite 611, Oregon City, OR 97045; 877-306-5055;
© 2020 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this publication are for general information only and are not intended to provide tax or legal advice or recommendations for any particular situation or type of retirement plan. Nothing in this publication should be construed as legal or tax guidance, nor as the sole authority on any regulation, law, or ruling as it applies to a specific plan or situation. Plan sponsors should always consult the plan’s legal counsel or tax advisor for advice regarding plan-specific issues.