Trump’s tariffs, and the subsequent retaliation by other nations, have caused havoc for US stocks over the past few weeks. And it appears that the burden falls on American savers – especially those nearing retirement.
As the Trump administration continues its global trade war, Americans are losing thousands of dollars in their 401(k).
The ongoing sell-off puts their plans to rely on retirement accounts throughout their senior years at risk.
Some US retirees are already questioning if they will be able to continue their retirement if the market continues to tumble.
“It’s stressful. If this continues, I won’t be able to retire,” said Victor Fettes in an interview with NBC last week. Victor Fettes is a 54-year old Georgian retiree.
Why is the market decline important for US retirees and their pensions?
This week, the benchmark S&P 500 was down by about 20% from its year-to date high.
This is important for American retirees, as 401(k), savings accounts have significant exposure to stock market through mutual funds or exchange-traded fund.
This is why 2025 savers will be more concerned about the tariff-driven sell-off, which has wiped out more than $11 trillion in US markets since Trump took office on January 20 .
US retirees also delay home renovations and big-ticket purchases as tariffs continue to stymie the global economy. Some people are worried that their 401(k), or retirement fund, losses will also affect their quality of living.
What Trump’s 90 day tariff pause means
US stocks are edging up as I write this after US President Donald Trump declared a 90-day suspension of all reciprocal tariffs against non-retaliating nations.
It’s unclear whether this upside will last, as it’s not clear that he would roll back the tariffs.
It does not do much to mitigate the expected negative impact on US businesses of the new levies. This could lead to a further decline in stock prices, resulting in additional losses for US retirees.
The benchmark S&P 500 is currently up by nearly 7.0% from its previous close.
Experts have lowered year-end SPX targets
Investment firms have also become more dovish about SPX this year due to tariff-driven uncertainty.
David Lefkowtiz – the head of US equity at UBS in Zurich – lowered his target for the benchmark index year end to 5,800 earlier this week.
Lefkowitz has backed down from his previous call of 6,400 because Trump’s trade policies caused “our economic team to lower their growth expectations in order to reflect anemic growth this year.”
In his research note the strategist reduced his estimate of SPX earnings per share for this year by nearly 6.0%, to $250.
His year-end target for the benchmark index still suggests a potential gain of around 8.0%.
This post American retirees worry about their future as Trump tariffs hit 401(k), retirement savings first appeared on The ICD
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