For many Americans, the recent stock market sell-off has caused significant anxiety and concern about their retirement investments. However, most investors can breathe a sigh of relief, as the impact on their long-term portfolios is likely to be minimal.
A majority of the US workforce, including half of private sector workers, invests in stocks through 401(k) accounts. This has led to an increase in Americans participating in the stock market, despite its notorious volatility.
Those closest to retirement may need to rebalance their portfolios by selling bonds and investing in stocks when it’s cheaper. However, individuals who have already reached retirement should be concerned about withdrawal rates and portfolio changes.
Retirement accounts are designed for long-term growth, with 99.7% of the withdrawn amount compounding over time. A drawdown of 20-30% is expected, but overall returns are nearly always positive in the long term.
In fact, someone who retired last year with $600,000 in their account can expect to withdraw $2,000 per month and still have a balance worth more than they started with at the end of 2024.
Source: https://www.axios.com/2025/04/08/401k-stock-market-investment-accounts