Investing in Down Market

When financial markets become volatile, it’s natural to wonder whether you should stop investing until things “settle down.” Seeing account balances fluctuate can be unsettling, but history has shown that emotional investment decisions often do more harm than good.

The Missouri State University Benefits team encourages employees to take advantage of the educational resources available through MO Deferred Comp, our approved asset manager for the university’s 457(b) retirement savings plan.

One of their newest DC Update videos, “Should You Stop Investing During a Down Market?”, addresses one of the most common questions investors ask during periods of market uncertainty. The video explains why trying to time the market is extremely difficult and why continuing to invest consistently may help position you for long-term growth when markets recover. Rather than making decisions based on short-term market swings, the video encourages investors to stay focused on their long-term retirement goals.

What is the MO Deferred Comp Plan?

MO Deferred Comp is Missouri State University’s 457(b) supplemental retirement savings plan and is available to all full-time and part-time employees. Unlike MOSERS pension or CURP retirement benefit, a 457(b) allows you to voluntarily save additional money for retirement through convenient payroll deductions.

A 457(b) plan offers several advantages:

• Contributions are made automatically through payroll.
• You choose how much to contribute and may change your contribution amount throughout the year.
• Your savings grow tax-deferred until withdrawal (for pre-tax contributions), or can grow tax-free when using Roth contributions if IRS requirements are met.
• The plan offers professionally managed investment options designed specifically for Missouri public employees.

Pretax or Roth—Which Is Right for You?

One of the most important decisions when contributing to your 457(b) is whether to save using pretax or Roth (after-tax) contributions.

• Pretax contributions reduce your taxable income today. You generally pay income taxes when you withdraw the money during retirement.
• Roth contributions are made after taxes have already been paid. Qualified withdrawals—including investment earnings—are generally tax-free in retirement.

Neither option is universally better than the other—it depends on your current financial situation, expected future tax rates, and retirement goals.

MO Deferred Comp explains these differences in their educational video:

Retirement Savings 101: Roth vs. Pretax Contributions

This short video walks through the advantages of each contribution type and can help you determine which strategy may best fit your financial plan.

How Does a 457(b) Compare to an IRA?

Many employees also wonder whether they should save in a workplace retirement plan or open an Individual Retirement Account (IRA).

The answer may actually be both.

MO Deferred Comp’s video “457(b) Plan vs. IRA: What’s the Difference?” explains key differences, including:

• Contribution limits
• Payroll deduction convenience
• Withdrawal rules
• Investment flexibility
• Tax advantages

Understanding how these accounts work together can help you build a more diversified retirement strategy.

Take a Long-Term View

Market volatility is a normal part of investing. While no one enjoys seeing temporary declines, retirement investing is generally measured in years and decades—not days or weeks.

If you’re feeling uncertain about your retirement savings, take advantage of MO Deferred Comp’s educational resources before making changes to your investment strategy. A few minutes spent learning today may help you make more confident financial decisions for years to come.

If you have questions about the Missouri State University 457(b) plan or would like to meet with a local MO Deferred Comp financial education professional, visit the MO Deferred Comp website or contact Mr. Jesse Stewart, Education Specialist, at (573) 644-1265