5 Ways Retirees Can Protect Their Savings In Trump’s Economy
Written by
John Schmoll
Edited by
Amen Oyiboke
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The first several months of President Trump’s presidency have proven tumultuous for many retirees. Stocks plummeted in early April following ‘Liberation Day’ tariffs. Other economic policies, such as the One Big Beautiful Bill (OBBB), could further wreak havoc on the finances of retired Americans.
Retirees are understandably concerned whenever economic turmoil hits, as their income-earning years are often behind them. Here are five ways retirees can safeguard their savings during Trump’s second term.
Make Necessary Purchases Now
Trump’s sweeping tariffs have roiled markets since early April. Reciprocal tariffs are on pause until July 9. Unless action is taken to further delay or reduce those tariffs, the cost of many goods could increase significantly.
For retired Americans, this spike can damage budgets. Items from major appliances to cars could substantially increase in cost. New cars priced under $40,000, for example, could increase by $6,000, according to Kelley Blue Book. Making unplanned purchases isn’t wise, but retired Americans budgeting and planning for a major purchase may want to act now to avoid overpaying once tariffs hit.
Grow Cash Buffers
A topsy-turvy stock market is particularly problematic for retirees. They need to be able to survive the storm without having to dip into retirement savings when emergencies arise.
Retirees should aim to have at least one to two years of living expenses set aside. Such an amount provides a two-pronged safety net: it helps retirees avoid selling when investments are down and provides security if a true emergency hits. Consider a high-yield savings account or a certificate of deposit (CD) to house the savings to maximize interest.
Adjust Your Portfolio Mix
It’s rarely good to time the market. However, turbulent times do provide a good opportunity to assess your portfolio. Perhaps it’s a good time to adjust your portfolio to reduce needless exposure to risk. Â
Having an investment plan is vital during such times, as it can help guide decisions. Speaking with a financial advisor is a wise choice for retirees who are unsure about what to do. The advisor can help protect against emotional decisions that will negatively impact your nest egg. They might help direct you to strategies to benefit you, such as tax-loss harvesting, to reduce your tax burden.
Contribute to an HSA if Possible
Healthcare costs are a common concern for retirees. Trump may have his sights on something that could drive increased costs for many retirees — tariffs on foreign-made medicines. This is on top of Trump reversing President Biden’s efforts to cap costs on prescription drugs for Medicare and Medicaid recipients.
One way some retirees can manage increased costs is by contributing to a health savings account (HSA). Retirees can contribute to HSAs so long as they’re not enrolled in Medicare. HSAs provide numerous tax benefits, including the ability to withdraw funds tax-free if they’re for a qualified medical expense.
Optimize Social Security Benefits
Claiming Social Security is a personal decision, but delaying benefits can increase payouts up to 30% for some Americans, according to the Social Security Administration. This could greatly help retirees who don’t need the funds now. Delaying won’t work for all retirees, but it’s worth considering if you can live off of other savings or investments.
Trump has promised to eradicate federal taxes on benefits, but it’s not included in his current version of the OBBB. It does provide a temporary increase in the standard deduction for older Americans, which could reduce taxable income for Social Security recipients.
Understandably, many retirees may want to take action in light of the headlines. The best course of action is to stay informed and educate yourself as to how upheaval may impact your savings. A financial advisor can be a great resource to use to help make knowledgeable decisions that will protect your finances.
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