COVID-19 has been battering the U.S. economy since cases started multiplying in March. Three months later, unemployment levels are still at a record high, and millions of Americans are grappling with financial uncertainty.

COVID-19 has also done a number on the stock market over the past three months. Though stocks have regained much of the value they lost earlier on in the year, when our first bear market in over a decade hit, investment account and retirement plan balances are still down across the board.

What's interesting about the latter, though, is the way those paper or on-screen losses played out by age group. In a recent Personal Capital survey, here's how much value retirement plans lost between Jan. 31 and March 31 of this year:

Age of Savers

Average Balance as of Jan. 31

Average Balance as of March 31

Percentage of Plan Value Lost





























Data source: Personal Capital.

At first glance, these are some pretty disheartening numbers. But actually, there's a very encouraging trend these numbers reveal: It seems as though Americans are doing a good job of investing appropriately for their age. And that's the ticket to avoiding losses during periods of intense stock market volatility, like the one we've all been experiencing since the pandemic hit U.S. soil.

Pen pointing toward pie chart showing allocation of stocks, bonds, and cash

Image source: Getty Images.

The importance of age-appropriate investments

The reason workers in their 20s, 30s, 40s, and 50s lost a greater amount, percentage-wise, of retirement plan value between late January and late March than their older counterparts likely boils down to one key factor: the right asset allocation.

When you're younger, it's wise to get aggressive in your retirement plan by loading up on stocks and investing a smaller amount of your money in bonds, which are less risky but also tend to offer substantially lower returns. As retirement nears, however, you should start shifting toward bonds and moving some money out of stocks to minimize your risk in the face of market volatility -- logic being that you may need to start tapping your account as soon as you retire and therefore don't have time to ride out stock market downturns.

Meanwhile, once you reach retirement, you should have a substantial portion of your IRA or 401(k) in bonds, as well as at least a year's worth of cash in that account. The fact that Americans in their 70s and 80s saw the lowest losses in their retirement plans, percentage-wise, is a strong indicator that they're investing their savings in an appropriately conservative manner. And the fact that younger Americans saw greater losses means that they, too, are investing appropriately given their age.

Of course, age isn't the only factor that should go into your long-term investment strategy. You'll also want to consider your personal goals as well as your individual appetite for risk. But the numbers above are pretty much what we'd expect to see on an age-adjusted basis, which means Americans seem to have a pretty good handle on how to invest at various stages of life.