As Americans are watching their retirement savings plummet ever since Wall Street took a plunge after the tariffs announcement in April, how specifically is it affecting retirement accounts and 401(k)s, and what, if anything, should employers and employees do differently with their long-term investments?
While financial experts acknowledge the panic many Americans are feeling about their 401(k)s since the stock market plummeted, most agree they are a solid long-term investment because most have a '60/40 account’ – 60% stocks and 40% stable investments, like bonds.
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We discussed the recent surge in tariffs leading to market instability and recession concerns with Aaron Cirksena, founder and CEO of MDRN Capital, about adjusting investment approaches to mitigate risks and long-term planning to safeguard retirement savings during economic uncertainty.
Q: How are escalating tariffs impacting retirement portfolios and strategies?
Aaron Cirksena: Tariffs are adding more noise to an already shaky market, and that’s making investors nervous—especially folks close to retirement. For most, the impact shows up as increased volatility in equity-heavy portfolios. It’s not about reacting to every headline, though—it’s about making sure your allocation isn’t overly exposed to sectors that get hit hardest when trade tensions rise.
Q: What are the best investment adjustments to mitigate risks associated with trade tensions?
A: This is where diversification does the heavy lifting. I’ve been advising clients to tilt a bit more toward defensive sectors like health care and utilities, and in some cases, shorten bond duration to lower interest rate sensitivity. You don’t need to overhaul your portfolio—you need to reduce the stress points.
Q: What is the best approach to long-term planning to safeguard retirement plans during economic uncertainty?
A: Keep your plan flexible and your mindset long-term. That means having enough cash or stable income sources to avoid tapping volatile assets during a downturn. Rebalancing, regular check-ins, and a smart withdrawal plan are what keep portfolios intact through uncertainty—not market timing.
Related: Trump’s tariffs: What it means for 401(k) retirement plans
Q: How can employers best support employees in their company retirement plan?
A: Right now, people need reassurance and clarity. Employers can help by offering better financial education, nudging participants toward target-date funds or managed accounts, and making sure employees know who to talk to when markets get shaky. The more guidance people have, the less likely they are to make emotional, costly decisions.
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Lynn Cavanaugh
Lynn Varacalli Cavanaugh is Senior Editor, Retirement at BenefitsPRO. Prior, she was editor-in-chief of the What's New in Benefits & Compensation newsletter. She has worked for major firms in the employee benefits space, Vanguard and Willis Towers Watson, as well as top media companies, including Condé Nast and American Media.
