Important tips to remember regarding pension saving

Staying invested in a downturn can help your pension recover faster

  • Research shows that the worst days for the market are often closely followed by the best days.
  • For retirement investors, staying in the market means you’ll be ready for those big gains.
  • Data from the financial crisis show just about how long it took investors who stayed in to recover.

But it turns out investors who left their retirement nest eggs alone fared best.

That’s according to research from J.P. Morgan, which used the firm’s own data combined with research from the Investment Company Institute.

In fact, in the past 20-year period through the end of 2019, six of the 10 best days in the market occurred within two weeks of the 10 worst days, according to Katherine Roy, chief retirement strategist at J.P. Morgan.


Data from the last financial crisis also show that staying invested, helped retirement accounts recover more quickly. For those who stayed the course, account values fully bounced back within three years, or by the end of 2010. Those with traditional allocations — such as 60% stocks, 40% bonds — fared particularly well, Roy noted.

Aside from taking those cues, there are several tips for what retirement and other long term savers should do now.

  • Just say no to looking at your account. “Don’t log in and look at your account balance,” Roy said. “Just trust that you’re making steady contributions through this.”
  • Keep contributing as much as you can. “If you’re not impacted from an employment or a salary perspective, keep trying to save as much as you can,” Roy said.
  • Adjust your spending habits. “Building up an emergency reserve fund,” Roy said. “But also make sure that you’re getting used to that lifestyle that might be more easily replaced” with those savings, particularly if you’re approaching retirement, she said.
  • Only tap your pension as a last resort. In 2008 and 2009, many account holders made hardship withdrawals, rather than taking out a loan against their balances. If you do decide to tap your retirement funds, make a point of paying it back. If you do take a loan, make sure you’re still saving and contributing enough to get your employer’s match, Roy said.

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