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If you have a 401(k), your retirement savings will likely be invested in SpaceX sooner or later, and that has many savers feeling squeamish.

The rocket company's stock has been volatile since its public market debut, surging to heady highs from the June 12 opening price of $150 and sinking to its lowest close on Thursday.

Those ups and downs aren't uncommon following major IPOs. Think Lyft (LYFT), Coinbase (COIN), Robinhood (HOOD), and Rivian (RIVN), which all saw major 12-month slides ranging from Coinbase's 55% share drop to Robinhood's 74% plunge after going public, according to Truist chief investment officer Keith Lerner, who studied 30 of the last major IPOs.

Facebook (now Meta (META)) shares dropped 32% in the first year of trading, while the S&P 500 Index climbed 10% during that same time.

What's different here is that this stock has an immediate impact for millions of retirement savers who invest in a 401(k) via broad index funds — and may have unknowingly acquired the stock.

Due to the easing of rules that kept unprofitable firms with no track record out of index funds where droves of savers invest, SpaceX became eligible for inclusion shortly after its IPO.

The Nasdaq 100 (^NDX) index and the Russell 1000 (^RUI) changed their rules to accommodate mega IPOs like SpaceX into their flagship indexes within the first few days of trading.

As a result, 401(k)s and other retirement accounts will have exposure to SpaceX — mostly through index and total market funds, including those that track the Nasdaq-100.

As a refresher, index funds are designed to track the performance of a specific market benchmark. They passively buy and hold securities in the same proportions as the index they follow.

So, any investor who owns shares in these funds will likely own SpaceX in their employer-provided plans. To be clear, most 401(k) exposure is small for now.

If you're worried about the stock's volatility impacting your savings, there are things you can do to manage that uncertainty.

Remember that you're investing for the long haul in a 401(k). 

"You are picking strategies, not stocks," Robert Persichitte, a financial planner based in Arvada, Colo., said. "If that strategy includes SpaceX, it might still be appropriate, even if you don't like individual stocks in that strategy."

While SpaceX is a massive company, the publicly available shares are minimal, so its impact on a well-diversified broad-market index is limited, especially in the short run. 

What makes an index fund attractive is that it holds only a percentage of the stock of companies on the open market.

As SpaceX insiders are allowed to sell their stock after required holding periods expire, however, the total number of shares on the market will increase, making the company a bigger factor in broad-based index funds. That's worth keeping an eye on.

Before you panic over the swings in SpaceX stock, review what funds are held in your 401(k) portfolio and the indexes they mirror. 

"It can be challenging to figure out exactly what various 401(k) funds include," David Haas, a financial planner in Franklin Lakes, N.J., told Yahoo Finance. "Sometimes the 401(k) plans use mutual funds or ETFs, and you can research those. The fund companies will publish information on the fund composition. ETFs are published daily, but mutual funds are only published quarterly."

It can also be hard with target-date funds. These are often funds of funds, so you have to do extensive research to know exactly what the underlying investments are, he added.

For these funds, though, the impact will be even lighter than if you owned a total market fund alone, since target-date portfolios are presumably not 100% equity, Zachary Evens, a passive strategies research analyst at Morningstar, previously told Yahoo Finance.

Consider this: If SpaceX stock made up 0.15% of a target-date index fund that is 60% equities and 40% bonds, only 0.09% of an individual investor's holdings would be in SpaceX at first. That would slowly increase as the initial IPO investors sell in the open market, but "it shouldn't increase substantially," according to Evens.

The overall diversification benefit in a target-date fund outweighs the emotional concern around owning any SpaceX shares, added Britton Williams, a financial planner in Raleigh, N.C.

A real fix is to move your money out of any funds that have SpaceX exposure and into an S&P 500 index fund. The S&P 500 made no changes to its rules for a company's entry. To join the S&P 500, a company must have traded publicly for at least 12 months and have posted four consecutive quarters of profitability.

So for at least the next year and likely longer, SpaceX will not be part of the holdings.

Another option is to invest in international funds or value-oriented ones that are not in the SpaceX orbit. These are the least likely to contain SpaceX, but it may still be hard to know for sure, per Haas.

Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a career and retirement strategist and the author of 14 books, including "Retirement Bites: A Gen X Guide to Securing Your Financial Future," "In Control at 50+: How to Succeed in the New World of Work," and "Never Too Old to Get Rich." Follow her on Bluesky and X. You can reach her at kerry.hannon@yahooinc.com

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