7 Powerful Ways To Shield Your Retirement During a Global Trade War
Written by
Jennifer Taylor
Edited by
Zuri Anderson
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The U.S. is in a global trade war, and your retirement is at stake. Now is the time to take action, as the 2025 economic outlook isn’t too promising.
Global economic growth is expected to decline from 3.3% in 2024 to 2.9% in 2025, according to the Organisation for Economic Co-operation and Development. Much more drastic, gross domestic product growth in the U.S. is expected to decrease from 2.8% in 2024 to 1.6% in 2025.
GOBankingRates spoke with two financial advisors to find how to keep your retirement safe amid the current economic turmoil. Keep reading to learn their advice, so you can make the best money moves for your golden years.
Review Your Spending Habits
“This is the moment to revisit your budget — not just cut back, but plan ahead,” said Melissa Cox, certified financial planner (CFP) and owner of Future-Focused Wealth. “Tariffs often hit the price of imported goods and materials.”
If you’re planning a major purchase, she said to map it out and think about whether it makes sense to buy now or wait.
“Planning beats reacting,” she said.
Keep Extra Cash on Hand
“Having a buffer lets you breathe when the market gets weird,” Cox said. “I usually recommend 12 to 18 months of living expenses in a high-yield savings account — especially for retirees.”
This can keep you from having to sell the investments at a bad time, just to pay the bills, she said.
Don’t Try To Time the Market
Fear causes most people to lose more money than actual market decline, Cox said. Therefore, it’s best to stick with your long-term investment strategy and work with a financial professional who can help you make informed decisions, instead of those driven by panic.
Adjust Your Withdrawal Plan
If you’re already retired, you probably already have a withdrawal strategy in place. However, Cox said a global trade war might mean you need to be flexible with your withdrawal strategy.
“I walk clients through different ‘what if’ scenarios, so we know how to adjust if inflation hits or the market dips,” she said.
Check Your Tax Strategy
It’s not uncommon for periods of economic change to bring shifts in tax policy, Cox said. This means now is a good time to review money moves like Roth conversions, charitable donations and tax-harvesting strategies see if they still make sense for you.
Invest in International Stocks
If you have a balanced portfolio with international equities, your portfolio will be significantly less volatile during a trade war, said Matthew Hale, certified financial planner (CFP) and owner of Make the Memory Financial Planning.
“This move captures the growth trend from companies looking to diversify away from the U.S., creating a boom in the international market space,” he said.
Take Advantage of Volatility
Recently, Hale said his firm has been rebalancing client portfolios, shifting bonds from stocks and picking up inexpensive shares during market downturns. They’ve also been processing Roth conversions.
If you haven’t made any adjustment to your portfolio since tariffs were imposed, now is a great time to review your positions. If you’re not already, consider working with a financial advisor who can help you make the best decisions for your hard-earned retirement fund.
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