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In recent days, a crisis in the financial sector sent markets into a tailspin, erasing hopes for an early 2023 turnaround.

For retirement savers, these losses come on the heels of a year when 401(k) account balances already lost nearly one-quarter of their value.

Average 401(k) balances sank 23% in 2022 to $103,900, according to the most recent report by Fidelity Investments, the nation’s largest provider of 401(k) plans. Individual retirement account average balances were also down 20% year over year to $104,000, Fidelity found.

A separate analysis from Vanguard also found that average 401(k) balances fell 20% in 2022 to $112,572, and hardship withdrawals ticked up slightly.

“The concern is, in these uncertain times, do I continue adding money to my long-term plans?” said Louis Barajas, CEO of International Private Wealth Advisors, a certified financial planner and member of CNBC’s Advisor Council.

In fact, “this is the best time to continue to contribute.”

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After double-digit losses in 2022 for both the stock and bond markets, it’s understandable why some may be hesitant to continue investing, particularly when fears of a banking crisis are spreading. 

“Everybody wants to get out when there’s uncertainty,” Barajas said.

However, when you are investing for the long-term, a down market is an opportunity to buy shares at a lower price, he added, a strategy known as dollar-cost averaging, which helps smooth out price fluctuations in the market. 

‘Everyone is feeling pressure financially’

After a tumultuous stretch, many older Americans are concerned about their retirement security. Nearly half, 48%, of retired Americans believe they’ll outlive their savings, a separate report by Clever Real Estate found.

At the same time, younger investors may be experiencing their first prolonged downturn. “We’ve had almost 12 years of a boom market, all they’ve seen is markets go up,” Barajas said.

“Everyone is feeling pressure financially — there’s a lot of uncertainty out there in the markets and the economy,” said Mike Shamrell, Fidelity’s vice president of thought leadership.

“A lot of people understand there’s going to be ups and downs,” Shamrell added. “Don’t let short-term economic events derail your long-term retirement savings efforts.”

To that end, try to increase your 401(k) contribution percentage this year, Barajas advised.

Barajas recommends a savings rate of 15%, including employer and employee contributions. That is slightly more than the current average, according to Fidelity.

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