Here’s why you shouldn’t worry about your retirement savings

Posted at 1:31 PM, Aug 24, 2015

NEW YORK -- You're not alone if you got a little spooked Monday morning.

A lot of people went to check on their retirement investments when the stock market took an epic 1,000-point plunge. Some found Vanguard's website down for a brief time at the start of the trading day.

It's understandable to feel some jitters. Within minutes of the opening, the Dow saw its largest point loss ever during a trading day. But do NOT panic, and don't touch your retirement savings today.

Investing for retirement is a long-term game. If you keep the appropriate share of your investments in stocks by gradually shifting into less risky assets as you get older, you should be able to weather whatever the market throws your way.

Those who stayed the course through the financial crisis have recovered far better than those who dropped out of the stock market in late 2008 and early 2009, according to Fidelity.

And despite the huge drop Monday morning, stocks have already started to bounce back. Investors are still up a lot since the market bottomed out in 2009. The S&P 500 has gained about 220% since then and the plunge in the past few days has wiped out a mere 11% of those gains.

Still, now could be a good time to check and see how much of your assets you actually do have in stocks.

While someone in their early 40s should have about 90% of their 401(k) investments in stocks, according to Fidelity, they should be shifting into less risky assets as they get closer to quitting their 9-to-5 gig. Someone 10 years away from retirement should have about 70% in stocks and someone 5 years away should have about 60% in stocks.

Even those who are approaching retirement should still have about 55% of their portfolio in stocks, said John Sweeney, the head of retirement and investing Strategies at Fidelity. Remember, your retirement could last 30 years and the growth of your savings needs to outpace inflation, he said.

There's a chance you're off track and don't even know it. A recent report from Fidelity found that 35% of Boomers had 10% more in the stock market than what investment experts suggest. As the stock market climbed over the past six years, the share of your investments in stocks could have jumped without you even realizing it.

If you do find you're over-exposed to stocks, don't make any moves just yet.

"Watch what happens here and reassess when things calm down," Sweeney said.