Kaili Killpack
4 min read
For retirees like Paula, 68, from New Jersey, the recent market plunge brought more than just numbers on a screen — it reignited old fears about outliving savings. “I’m just kind of stunned, and with so much money in the market, we just sort of have to hope we have enough time to recover,” Paula told NBC News. Like many Americans who rely on 401(k) investments for retirement income, she’s now grappling with uncertainty about what lies ahead.
Last week saw U.S. stock markets tumble in reaction to sweeping new tariffs introduced by President Donald Trump. On Friday, the S&P 500 dropped 6%, Nasdaq sank 5.8%, and the Dow lost over 2,200 points — marking one of the steepest declines since the pandemic crash in 2020. Combined with Thursday’s losses, the market saw its largest two-day drop in history, with $6.6 trillion in value wiped out.
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Victor Fettes, 54, retired a week before the downturn. He told NBC News he lost $58,000 in just two days. “If that continues, I can’t stay retired,” he said. For those like Fettes, the timing couldn’t be worse. Retirement plans that felt solid just days earlier are now under review.
Financial planner Brian Duffy told KOMO-TV News in Seattle that emotional reactions are common when markets dip — especially for those close to retirement. “Generally, those who are most emotional are unsure if they are prepped for retirement,” he said. “Do not make long-term decisions on short-term news.”
The value of a 401(k) is closely tied to the performance of the stock market. And when the market drops suddenly, so do retirement account balances. Treasury Secretary Scott Bessent told NBC’s “Meet the Press” on Sunday that, “Americans who want to retire right now, Americans who have put away for years in their savings accounts, I think they don’t look at the day-to-day fluctuations of what’s happening. And you know, in fact, most Americans don’t have everything in the market.”
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Bessent added that 401(k) plans often include a mix of stocks and bonds, like the popular “60/40” allocation — 60% stocks and 40% bonds.
