A 10% market correction generates roughly ten times more media coverage than the factors that actually drive long-term retirement outcomes: savings rate, fees, diversification, and time in the market.
This isn't to dismiss market volatility as irrelevant — sequence of returns risk is real, particularly for those within 5 years of retirement. A major downturn in the years just before or after you stop working can have an outsized impact compared to an equivalent decline earlier in your career.
What Actually Matters
For most people in the accumulation phase, the variables that move the needle are:
Contribution rate — How much you're putting away as a percentage of income dwarfs the impact of investment returns in the early decades. A 10% return on a small balance doesn't help you as much as a 7% return on a large one.
Cost of your investments — As covered in our piece on hidden fees, expense differences compound dramatically over time. Getting this right is more reliable than picking outperforming funds.
Time in the market — Missing the ten best days in any given decade can cut your returns roughly in half. Staying invested through volatility is a strategy, not a default.
The market will move. Your response to it determines far more than the movement itself.