Most financial experts will tell you NOT to withdraw your retirement money, even when it starts to lose value. The reasoning is that when the market improves again, ideally your money will “bounce back” and recover it's lost earnings... plus some.
Some people will roll their 401K or other retirement account into other qualified investment strategies to reduce their risk of losing money, despite expert suggestions to just leave it alone. They can't stand to see hundreds or thousands of dollars (or more) being lost to market fluctuations.
Whether you choose to leave your existing retirement account alone or move the funds into more stable savings vehicles, you have the option of using fixed rate IRAs to minimize your risks of losing the money you're saving. For individuals who intend to get their retirement money out of their 401K or other uninsured retirement investment, that money can be moved into a fixed rate IRA to prevent further loss due to the economy.
Start an Additional Long Term / Retirement Savings With No Risks
If your retirement investment strategy more closely follows the advice of many financial experts, in that you intend to leave the money where it is, that doesn't mean you can't start an additional long term savings or retirement fund to take advantage of a guaranteed savings option. Some people reduce their contributions to their primary retirement account when the markets are not performing well, and start socking money away into an FDIC insured option. Having both your standard retirement investments and FDIC insured options helps you diversify your portfolio and of course, you always have the option to move your fixed rate savings into your standard retirement investment if and when the markets recover and you want to take advantage of the higher earnings potential.
Setting up a no-risk long term savings is as easy as opening a fixed-rate IRA. This FDIC insured savings method is funded with Certificate of Deposits of varying maturity terms (that you select). You earn tax deferred interest on your contributions, and the contributions may be deductible from federal income tax if you meet certain criteria (check with your accountant).
Fixed rate IRAs are renewable when they reach the original date of maturity, and you can elect to withdraw the money at that point or set it up to automatically renew for another term for the same amount of time. This helps you access your money without penalties and withdrawal fees, which is nice because you can change your investment strategy as the market condition changes, or just leave the money alone to earn it's fixed-interest rate (with no risk of losing the contributions). While you can't just show up at the bank that holds your fixed rate IRA and withdraw the money the way you would money from a standard checking or savings account; each time your fixed rate IRA reaches it's maturity date you'll have a grace period of about 10 days when you can take the money without penalty and do whatever you'd like with it.