Stay on Track During Uncertain Times

Don't let short-term declines in the market negatively affect your long-term retirement savings goals.

As news of the coronavirus continues to dominate headlines, we want to let you know that we share your concern about this growing health issue. These are challenging times on many fronts. And while the scope of the virus remains uncertain and the long-term impact on economic growth is unknown, it's important to keep a long-term perspective when thinking about the money in your retirement savings.

Equities Will Rebound; Bonds Are Up

Equity market downturns are not uncommon and are typically short lived. While market declines can seem significant from a short-term perspective, markets have always recovered over the longer term. For example, over the past 40 years, equity markets, as shown by the S&P 500® have gone up 85% of the time. While stock market fluctuations tend to get most of the attention in the news, bonds have proven to be very valuable in this environment. Not only are bonds a proven way to compound income over the long term, but they have proven their diversification value in times of market stress when equities decline. In fact, bonds have performed well during the recent market declines, and they have risen in value this year.1

Don't Try to Time the Market

Compounding of returns over time is a powerful force for achieving retirement goals. That's why it's important to focus on your time in the market over the long term, rather than attempting to time when to get in and out of the market. While it may seem tempting to try to get out of the market to avoid losses, the truth is that nobody knows when it will be the "right" time to get back in, and missing the eventual rebound can impact longer-term performance.

"Investing for retirement should be looked at like running a marathon," said Stephen Rich, President and Chief Executive Officer, Capital Management LLC.2 "In this context, investment performance in any one month, or months, is just a very small part of the journey. In fact, for long-term investors, maintaining your discipline can be very advantageous during this time in that you are buying stocks at current lower prices, which could increase the potential return over the long term."

Be Sure Your Portfolio Is Diversified

Asset allocation and diversification are the two most important factors to long-term investing success. The combination of equities and bonds, including among the funds you choose, can determine your potential future returns, as well as the volatility, or up and down movement, in your portfolio. Having a diversified portfolio that is appropriate for your time horizon and risk tolerance, and that you can stick with during short periods of market volatility, is a sensible approach for retirement savings and investing.3

Strike the Right Balance

Our Asset Allocation Funds prudently balance risk and return based on your risk tolerance, while our Target-Date Retirement Funds do the same based on your expected retirement date. For example, our 2060 Retirement Fund, which has a higher allocation to equities and is therefore more exposed to recent market movements, is appropriate given that you have 40 years to retirement. By contrast, our 2025 Retirement Fund has a much lower allocation to equities and more to fixed income given that the expected retirement date is within five years. While this fund will fare better in a declining equity market than the 2060 Fund, it has a lower historical and expected return over time than the 2060 Fund given its more conservative asset allocation. Target-Date funds follow a glide path that governs their asset allocation, which helps reduce risk as you get closer to your retirement age.4

Take Advantage of Our Resources

We recognize that you may be concerned about the ongoing volatility in the stock market. Just remember, we're here to help. If you have questions related to your account, please contact your Regional Office representative, or call 800-468-3785, today.
1 Investing in bonds involves risk. Bond prices generally fall when interest rates rise.
2 Mutual of America Capital Management LLC is a registered investment adviser and an indirect, wholly owned subsidiary of Mutual of America Life Insurance Company.
3 Diversification does not guarantee investment returns or eliminate the risk of loss.
4 At any time within 10 years after a Retirement Fund has reached its target retirement year, the assets may be transferred into the Mutual of America Retirement Income Fund if approved by the Board of Directors of Mutual of America Investment Corporation. The maturing Retirement Fund will then cease to exist, and its participants will automatically become participants in the Retirement Income Fund. The Retirement Income Fund is intended for investors who have reached retirement or have passed their anticipated retirement year, and seeks current income consistent with preservation of income and, to a lesser extent, capital appreciation.
You should consider the investment objectives, risks, and charges and expenses of the variable annuity contract and the underlying investment funds carefully before investing. This and other information is contained in the contract prospectus or brochure and underlying funds prospectuses and summary prospectuses, which can be obtained by calling or visiting mutualofamerica.com. Read them carefully before investing.

Mutual of America's group and individual retirement products are variable annuity contracts and are suitable for long-term investing, particularly for retirement savings. The value of a variable annuity contract will fluctuate depending on the performance of the Separate Account investment options you choose. Upon redemption, you could receive more or less than the principal amount invested. A variable annuity contract provides no additional tax-deferred treatment of benefits beyond the treatment provided to any qualified retirement plan or IRA by applicable tax law. You should consider a variable annuity contract's other features before making a decision.

The target date set forth in each Retirement Fund's name is the approximate date that the fund expects investors to retire and begin withdrawing their account balance. The value of a Retirement Fund is not guaranteed at any time, including at and after the target date. There is no guarantee that a Retirement Fund will correctly predict market or economic conditions, and as with other mutual fund investments, you could lose money. In addition to a retirement date, individuals should consider their risk tolerance, time horizon, personal circumstances and complete financial situation before investing.

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