President Trump’s recent tariffs have caused significant economic uncertainty, leaving many Americans worried about their retirement savings. The stock market has experienced volatility, with the S&P down 4.2% and the Dow Jones down 3.2% since the tariffs were announced on April 2. Additionally, over 60% of top CEOs predict an economic downturn within the next six months, and the tariffs are expected to cost American households an extra $4,700 this year.
Financial experts advise retirees and those nearing retirement to take measured steps to secure their savings. One of the most frequently recommended actions is to seek the guidance of a financial adviser. Robert R.
Johnson, a finance professor at Creighton University, explains that advisers can help retirees transition from saving to spending in retirement. Regarding investments, experts caution against making drastic changes during a downturn. Adem Selita, co-founder of The Debt Relief Company, suggests that investors nearing retirement age should “stay the course and make incremental adjustments.” Significant changes can lead to regret and financial loss.
For those feeling anxious about their retirement accounts, seeking clarity from portfolio managers can help. They can explain current investment strategies and suggest adjustments if necessary.
Trump tariffs impact retirement approach
However, experts advise against creating a new Investment Policy Statement (IPS) during volatile market conditions, as an IPS aims to guide investors through changing market conditions. Small actions can also help reduce financial anxiety. Revising spending habits, canceling unnecessary subscriptions, or shopping for cheaper utilities can provide a sense of control over finances.
Additionally, engaging in activities that promote mental well-being, such as spending time with loved ones or practicing mindfulness, is crucial for making wise financial choices. Behavioral financial expert Clements Evans emphasizes the importance of being prepared rather than worrying. She advises focusing on what you can control, ignoring headlines when making financial moves, and taking breaks from distressing news.
Self-made millionaire Ramit Sethi agrees, cautioning against drastic financial changes unless facing an immediate emergency. Financial advisors recommend focusing on fundamentals and paying more attention to data than narrative. Building a cash cushion and having enough to sustain yearly withdrawals can help retirees feel more secure.
Sticking to a well-thought-out investment strategy can also provide confidence when making changes. While the current economic situation may seem daunting, being prepared and making informed decisions can help reduce stress and protect your financial well-being. Retirees can navigate these turbulent times by taking measured steps and seeking professional advice to secure their financial future.
Image Credits: Photo by Rinson Chory; Unsplash
