What to Do if Your 401(k) Loses Money

Don't panic. You can weather the storm by following these tips.

By Kailey Hagen – Updated May 15, 2025 at 2:22 PM

Key Points

Ensure your 401(k) investments are diversified to minimize risk from market fluctuations.
Avoid panic selling during downturns; stay the course if your risk tolerance allows it.
Shift to more stable investments like bonds as you near retirement to safeguard assets.

You invest in your 401(k) to make your money grow over time, but it doesn't always work out that way. When you notice your savings losing value, your first instinct may be to sell everything, but this usually isn't your best option. We will discuss five actionable steps you can take if your 401(k) account starts losing money.

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An investor lying their head on a table in front of a falling stock chart. — Image source: Getty Images.

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If you believe your loss is due to a mistake on your part, take a breath and try to see it as a learning opportunity. Correct the error and let what you've learned make you an even better investor going forward.

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About the Author

Kailey Hagen, CFP, is a contributing Motley Fool retirement analyst covering Social Security, Medicare, and retirement planning. Before The Motley Fool, Kailey was a research analyst for Reviews.com focusing on credit and banking products. She is a Certified Financial Planner® and holds a bachelor’s degree in English from the University of Wisconsin-Madison.

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