Why Is My 401k Losing Money

It is a scary time in our country and watching the stock market take a hit and seeing your 401k lose between 10-30% this year depending on what you’re invested in.

The guide below will take you through some ideas and steps to make sure you’re informing your financial advisor is following your risk tolerance and making sure your retirement savings will be intact for the long term.

Before we jump into the steps you should be thinking about for your retirement accounts, it’s important to understand the backdrop of what’s going on in our country (and globally) that will have an impact on your 401k.

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What is happening in our world that’s causing my 401k to lose money?

National Debt

We are in a state that we’ve never been before where the national debt is over $32 Trillion which is crazy. It took our country 200 years to get to the first trillion of debt and over the last few years we’ve printed 20% of our total money supply. The expectation is that we’ll add an additional $5 Trillion of debt by 2030 with what we printed over the COVID relief bills. Watch this video for more info about what’s going on here.

What happens when you print endless money that isn’t backed by gold anymore? Do our leaders really think there won’t be any negative ramifications for just printing money? It sure seems this way and it’s hard to figure out


The Inflation Reduction Act is also something that doesn’t seem to be doing anything and we have a government that may increase the inflation from 2% to 4%.

Someone told me that it was heatflation or greedflation and yes those are real things – click on the links and read about the crazy world we live in. I live in Oregon and we see $5-7 per gallon fuel and then we see Exxon posting the biggest quarterly profits they’ve had. It’s a combo of greedflation and this money printing mess we are in.

What should I do with my 401k right now in 2022?

The best thing to do with your 401k is to make sure you’re working with your financial advisor who understands your risk tolerance. It also depends on your investment strategies, retirement age and whether or not you have an emergency fund as the market decline continues.

I love going down the rabbit hole of trying to find interesting investment options where you can not have an investment portfolio where you’re able to diversify your retirement assets even further. I have a few good ideas that your financial planner isn’t going to like but I sure do!

Gold IRA

There are companies out there that will let you move your 401k funds from USD investments into gold. The USD was tied to gold and we moved off of it. It is possible to get into gold without having to bury a treasure chest in your backyard with gold bars. The best option is using Augusta Precious Metals who can help you with your investment goals and no matter if we’re in a bear market or bull market, gold is going to consistently go up. I also think there is a chance we have the US Dollar going back on the gold standard that Alex Mooney (US Congressmen) introduced the Gold Standard Restoration Act and there is a chance that the US Dollar does get backed by gold but if you’re nearing retirement, that’s most likely a bet you can’t make. I do think that to minimize risk on this one you should really consider putting some of your money into precious metals as one of your asset classes.

Bitcoin & BitIRA

This is another category that you should consider with the market downturns. This is clearly not one of the Vanguard target date funds or one of the index funds that is suppose to be low risk. Based on all the reasons above there may be more stable investments without thinking about panic selling. It’s hard to do this when you continue to see your 401k lose value but markets go through waves but this does feel different.

If you do want to get into Bitcoin and cryptocurrency, I highly recommend that you read this. It’s one of the best pieces out there and it came out recently. It’s over 40,000 words and more of a book but it will help you really understand what it is and why there is still upside. Unfortunately it was suppose to be a hedge against inflation and the traditional markets but it feels like it’s just greed continuing to take over on this one. Read the piece and if you think Bitcoin is a good idea – go to BitIRA where you can move some of your 401k into Bitcoin without having to use post-tax cash.


This one is one of my new favorites because they are a team of traders that are able to take 2-4% per week which compounds into 15-20% per month. It’s adds up quickly especially when we’re seeing high inflation. This isn’t something you can invest in with your 401k (that I know of) but it is one of the investment vehicles where they are actively managed funds that allow you to get heavily invested without worrying about the market’s ups and downs. This can be a short term or long term investment depending on your risk tolerance.

One of the key takeaways I’ve found from any new investment is that you’re thinking about having a very diversified portfolio that allows you to bounce back from market losses and not worry about the short term dips. The benefit with NovaTech is that they have a team investing the smart way and are a team of long term investors.

This is a Florida based company so it’s in the US and one that will be around for the long term. It’s much lower risk than buying a single stock or investing more into index funds, mutual funds or adding more to your retirement accounts. Even during the stock market crash, they were able to get 1-3% returns and they haven’t had a down week during all this crazy town.

Can I lose money in my 401k?

It is possible to lose money in anything you put it into but if you just let it sit in US Dollars you’re losing value because of inflation and at this rate it’s ~4% per year now which is crazy. Your retirement account is incredibly important and markets will rise and fall. It’s just important to continue to come back to thinking about the long term and your retirement age. There are external risks you can’t control like whether Putin is going to use a tactical nuclear bomb in Ukraine. If China decides to go after Singapore and cut out our silicon computer chips the tech industry will crumble and clearly kill off even more of your 401k.

You can’t control stock prices, small cap funds or whether bear markets continue to give you signifiant losses but what you can do is mitigate risk by distributing your funds no matter what type of market volatility we are seeing.

How can I prevent my 401k from losing money?

We’ve talked about everything from fixed income investments to stock market crashes and the best way of actually prevent your 401k from losing money is to make sure you’re across all types of investments during market declines. The more money you have, the more you can distribute it across small cap, mid cap and large cap stocks in the US markets. It’s also possible that you can look at other assets like precious metals, cryptocurrency and even foreign currency.

Target Date Fund

There are funds that will target your retirement and adjust based on the time you have left prior to retirement. The typical American retirement savings is extremely low and most don’t think about all the variation and investment options for their portfolio of investments. Whether markets rise or fall you’re going to be in one of these target date funds if you’re associated to some employer sponsored account. If you just hit the default investment mode – this is what you get.

Mutual Funds

A mutual fund is completely normal to be invested in and would be sound advice from your financial advisor. You’ll have lower risk, lower fees and various companies always look at your retirement plan to make sure you have some type of mutual funds associated to your retirement account.

Understanding the different investment options

Understanding what you can do in a bear market or bull market really does depend on the average length of time you’re going to be investing or how long you’re willing to be losing money. The stock market is just one option but you can ask for some help to distribute across a gold IRA, cryptocurrency (BitIRA) and there are other potential investment options like bond funds too.

I love all the options and think you can get a diversified portfolio without having to spend too much time thinking about your index funds or when the next bear market is coming.

Should I sell my 401k if I lose money?

You should always talk to a financial advisor or someone that helps you make your financial decisions but the longer answer is – it depends.

This all depends on when your retirement age is. If you’ve got 30-40 years before retirement then you should not (in my unofficial opinion). If you have a few years left, I would really think about what the potential downside is depending on what’s going on in the market. If there is a high probability that the market will continue to decline, you really need to think about how to minimize the downside.

I love gold for this but what do I know. I would consider looking at it and think about how it can help you diversify outside of the stock market.

Looking Ahead

As you grow older, it’s important to think about your investment portfolio and how much risk you’re willing to take. I like to get involved in all the potential investment options and what I can do to distribute funds across my 401k. Others just want to hit the easy button and go after their Target Date Funds.

This decision is really up to you and trying to beat the market is really not something you can do. The best thing you can do is diversify across asset classes that cross between currency (crypto and fiat), precious metals, international/domestic investments and the small, mid and large cap stocks.

I can talk about this all day and if you want to continue discussing the topic, get in contact and let’s chat!

Andrew's Pick

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