You might be taking a look at your 401k today feeling a little shocked to say the least as a major sell-off continues to ripple through global markets. To discuss how you should be allocating to your retirement account despite the recent market downturn, Cassandra Rupp, who is the CFP, Vanguard uh uh Cassandra Rupp, CFP, Vanguard senior wealth advisor is here. Cassandra, great to have you on the show. Uh, first and foremost, you know, as people are thinking through just today's activity, they're trying to get the sense of what a certified financial planner would be thinking about this and doing even in this. You know, what are the first things that people should be keeping in mind?

I think we can only control what we can control. We we put a plan into place, uh, regardless of what the market was going to do, what those conditions were going to be. So, my job as a a financial planner is to to keep my clients on track with those goals, um, and make sure we continue to follow them. So, we're going to do that regardless of what type of day the market is having.

So what are the biggest mistakes that people make with their 401Ks during days like this?

Well, in general, I wouldn't say always in days like this, in any day. I mean just not maximizing the savings into these types of plans, not taking advantage of an employer match. If we're getting into some of the the market components, um, selling out of investments at the wrong time, not following that long-term plan. You want to take a step back and say, what are my goals, what are my time horizon and what are my risk preferences months ago when you're setting up the account and not revisit that on a down market day. You've got to abide by that planning.

Okay, so with that in mind, we're taking a look at some of those tips here. How do how do you also pick the right retirement portfolio for yourself?

Sure. I think I think it's revisiting those points we just discussed. You know, what what type of investment product achieves those long-term goals? What risk am I comfortable with using something that is at a relatively low cost, it's not going to consume a lot of the total return. I'm just making sure again that you're staying focused on uh, checking in on that account over time and reassessing where you currently stand and if that still matches with the portfolio.

Certainly and and so from what you typically are navigating through in that thought process and and maximizing your savings over time, I mean, what is the time horizon that somebody should be keeping in mind while they're also looking to maximize their savings?

I think everyone's time horizon can be different. I mean, if we're if we're speaking to, you know, some of this reporting and 401Ks for retirement savings depends on what stage of your career you're at. Uh, we're seeing an increase in deferral in participant deferral rates above 4% now. So, we're seeing more and more individuals start to automatically save out of their, um, paychecks into these types of plans. We're seeing employers continuing to match these if we're looking at average deferral rates including the employer match we're getting an excess of 11%. We want investors to be focused on about a 12 to 15% savings rate based off of their income.

Are there any key differences that you're seeing in how different generations are preparing and and saving for retirement? Because there are some who are closer to retirement and looking at activity a a trading sell-off like we've seen over the past couple sessions, uh, that are saying, okay, well hold up now because I had I had banked on things uh, remaining less volatile than this.

Sure. I I think the Vanguard way is that we we were banking on volatility occurring at some point, right? We we want to take a step back when we're originally speaking when I'm speaking with my clients and say, what is appropriate for your time horizon now? So, I'm not treating somebody who's in their accumulation years, who has a much longer time to retirement, the same as somebody who's already close to retirement five years out and just uh, going to be needing liquidity sooner. So, we really want to be cognizant of that when we're setting up the portfolio, when you're making decisions on what investments to use so that there's not a panic when we reach this point because it will unfortunately be inevitable. We are going to see market turmoil. It's just when that is going to come.