What should employees do with their 401(k)s in this economy?

With all this talk about a recession looming over the economy, thousands of workers across the country are wondering what they should do with their 401(k)s as their nest eggs start to shrink.

And I totally understand how scary that can be, but take a deep breath and don’t panic.

The truth is, fear is a really bad financial advisor. When you’re investing, you have to remember that dips in the stock market come with the territory. But history shows that the stock market is always trending upward over the long haul. You just have to ride out the storm.

Related: Helping employees navigate retirement planning during high inflation

If you have employees worried about their 401(k)s, here are several action steps they can take right now to stay on track with retirement savings.

1. Keep a long-term perspective about investing.

There’s no doubt that 2022 has been a tough year for the stock market. But for employees who are years — or even decades — away from retirement, having a long-term perspective can keep them from making painful, short-sighted decisions with their 401(k).

Most experts look at the Dow Jones Industrial Index, S&P 500 and the Nasdaq to measure the overall health of the stock market as a whole. And while all three benchmarks are having a rough year, things look much better once you step back and look at the bigger picture.

Over the past five years, the Dow Jones is actually up 44%, the S&P 500 is up 56%, and the Nasdaq is up a whopping 78%—and this is after all the turbulence of the first few months of 2022.

So, here’s the moral of the story: Even with its ups and downs, historically, the stock market has trended upward.

2. Don’t take money out of your retirement accounts.

When the stock market is down, a lot of employees make the mistake of freaking out and taking money out of their 401(k)s. And that move can haunt them for years to come.

Here’s the thing: Investing in the stock market is like riding a roller coaster—you only get hurt if you jump off in the middle of the ride. The only people who actually lose money are the ones who take their money out when the market is down (that’s the last thing you should do)!

Not only could you potentially lose hundreds of thousands of dollars of future investment growth, but you’ll also face a 10% early withdrawal penalty for taking money out of your 401(k). And that’s on top of the taxes you’ll owe on those withdrawals. So, you can see why it’s so important to stay calm and stay on the roller coaster right now.

3. Continue to invest for retirement.

If you’re out of debt (you’ve paid off everything except the mortgage) and have three to six months of expenses saved for emergencies, then the best thing you can do is stay the course. Even though the value of the funds in your investment portfolio might be down, that also means your investing dollars could stretch further than before.

Look at it like this: Everything’s on sale right now, which means you’re now able to buy more shares of those mutual funds you’re already invested in. Take advantage of that opportunity and keep doing what you’re doing.

According to the 2022 SmartDollar Employee Benefits Study, six out of 10 employees say they feel behind on their retirement goals. If that’s you, this could be the perfect time to rethink your goals and get back on track.

4. Take advantage of your financial wellness benefits.

Now more than ever, companies that offer financial wellness programs are advising employees to pay off their debts and budget for the higher cost of gas and food. When employees don’t have any debt payments to worry about and actually have money in the bank for emergencies, they can increase what they contribute to their 401(k)s.

The 2022 SmartDollar Employee Benefits Study shows that by using their financial wellness benefit, about three out of 10 (29%) employees started saving for retirement. And not only did employees start saving for retirement, but one-quarter (24%) say they had more clarity around how much they should be saving for retirement. That’s amazing!

Remember this: Your income is your number one wealth-building tool. If your income is tied up in credit card and student loan payments every month, you’re paying for the past instead of saving for your future.

The fastest way to build wealth is to get out debt, budget so you know where every dollar of your income is going, have cash in the bank for emergencies, and consistently put money into your retirement account. Those steps will help you save for the long haul so you can have way less stress and way more stability in the future. You’ve got this.

Rachel Cruze is a #1 New York Times bestselling author, financial expert and host of The Rachel Cruze Show.