J.P. Morgan Asset Management has released its 2020 Guide to Retirement—the eighth edition of the report—examining the most significant issues influencing the retirement landscape.

During a press event that was moved from an in-person gathering to a webinar platform because of concerns about the ongoing COVID-19 viral disease outbreak, Katherine Roy, chief retirement strategist, said it is appropriate that the 2020 Guide emphasizes the increased anticipated market volatility that investors will likely face in coming years.

“The past few weeks have brought this theme to the forefront of retirement investors’ minds,” Roy said. “If you are a retirement investor, what should you do right now? Our message is clear—stay invested. If you respond emotionally and pull out of the equity markets, you will lock in your losses.”

Roy encouraged investors to remember the hard-earned lessons from the Great Recession more than a decade ago. The losses experienced during that time period were dramatic—particularly for those near their retirement date—but those who stayed the course have been richly rewarded.

On this point, Roy turned to page 43 of the new Guide to Retirement, which shows that participants can’t afford to sit out even a week or two based on daily volatility concerns. Specifically, the page shows that six of the best 10 days for the equity markets during the January 2000 to December 2019 time period occurred within two weeks of the 10 worst days. Case in point, the best day of 2015 (August 26) came only two days after the worst day (August 24).

“If you miss even a handful of these big rebound days, you will really damage your long-term returns,” Roy warned.

Sharon Carson, J.P. Morgan retirement strategist, joined Roy in introducing the 2020 Guide to Retirement. She emphasized the importance of investors understanding and accepting the role of volatility in the markets, suggesting they can help to steel themselves by establishing sufficient liquid emergency reserve funds.

“This kind of volatility event highlights the need for emergency funds and for a disciplined investing approach,” Carson said. “Times like these are going to happen now and again during the retirement savings journey, so committing to having that cushion is really important.”

As detailed in the Guide to Retirement, J.P. Morgan advocates for a three-pronged investment approach, defined on the short-end by immediate goals to establish and maintain an emergency reserve fund of total spending needs for three to six months. Mid-term wealth management goals can then be built around such things as saving for college expenses or a home purchase, and the long-term portion of the strategy can focus on retirement.

Stepping back from the topic of market volatility, Roy and Carson pointed to several pages in the guide—for example page 19—that emphasize the importance of balancing pre- and post-tax savings. They said their analysis shows that many more people could benefit from taking advantage of Roth 401(k)s or Roth individual retirement accounts (IRAs), especially in the current low-tax environment established by the Tax Cuts and Jobs Act.

“Managing taxes over a lifetime requires a balance of your current and future tax pictures,” Carson explained, encouraging investors to make income tax diversification a priority in order to have more flexibility and control in retirement.

According to the 2020 Guide to Retirement, contributing to a Roth early in one’s career and shifting as one’s income increases remains a generally effective strategy. On the other hand, one might also consider switching to Roth 401(k) contributions in peak earning years if wealth is already concentrated in tax-deferred accounts. Additionally, Roy and Carson said, making proactive Roth conversions in lower income retirement years can make sense if an individual’s or couple’s required minimum distributions are likely to push them into a higher bracket.

On the topic of health care for older workers and retirees, Roy and Carson suggested it may be prudent to assume an annual health care inflation rate of 6%—which may require growth as well as current income from the investment portfolio in retirement. They also pointed to page 34 of the guide, which shows there is need for more long-term care planning among the U.S. workforce.

“This care often starts at home before progressing to other settings,” Carson explained. “While considering the range of possibilities, take into account that one in 10 men and nearly two in 10 women are projected to have a significant care need for more than five years.”