What economic uncertainty means for your retirement—and what you can do about it

Key takeaways:

• Economic uncertainty is real, but short-term market swings don't have to derail a long-term retirement plan.
• Focus on the aspects of your retirement strategy you can control, including your savings habits, investment approach, and long-term goals.
• Review your plan periodically to make sure it still reflects your timeline, appetite for risk, and changing needs.
• A financial professional can help you make thoughtful decisions instead of reacting to market headlines.

If you've been following the news lately, you've probably seen plenty of reasons to feel uneasy about the economy. Rising costs, market ups and downs, and concerns about a potential recession can leave you wondering whether your retirement plans are still on track—and what, if anything, you should do about it.

Those concerns are understandable, but they don't have to dictate your financial decisions. When markets are uncertain, thoughtful decisions matter more than quick reactions. Staying focused on your long-term goals—and revisiting your financial plan as your circumstances change—can help you navigate uncertainty with greater confidence.

Economic uncertainty is real, but reacting emotionally can create more risk

Whether you're catching up on the news, scrolling through social media or talking with friends, it's easy to come across conversations about the economy. More than three in four (77%) non-retired investors say they're concerned about the possibility of a U.S. recession over the next 12 months, according to data from the Nationwide Retirement Institute®.

When uncertainty is high, it's natural to feel like you should do something. Some investors may see opportunities to adjust their portfolios, while others may wonder whether they should make changes to their current strategy. In fact, one in three (33%) non-retired investors say they plan to take advantage of investment opportunities now, up from 21% in the summer of 2024.

There's no one-size-fits-all response to a changing economy. The right approach depends on your retirement goals, time horizon and overall financial situation. While some changes may make sense, others can do more harm than good if they're driven primarily by short-term uncertainty rather than a long-term strategy.

That's why it's important to take a step back before making significant financial decisions. Sometimes the right move is to make an adjustment. Other times, it's to stay the course. The key is making that decision based on your retirement goals and financial plan—not uncertainty itself. A financial professional can help you evaluate your options and determine whether your current approach still supports the future you're working toward.

Many people feel pressure, but not everyone has a clear strategy

Economic uncertainty isn't the only challenge people are facing. The rising cost of living continues to put pressure on household budgets, making it harder for many people to balance today's financial needs with their retirement goals.

Nearly half (48%) of non-retired investors say increased cost of living is one of the biggest long-term challenges to their retirement portfolio. At the same time, many people are also thinking about future expenses, including retirement healthcare costs, that could affect their financial security.

Retirement planning involves more than managing rising costs. It also means understanding how your savings are positioned for changing market conditions and whether your retirement plan includes an asset protection strategy.

Our survey found that nearly three in ten (29%) non-retired investors say they do not currently have a strategy in place to protect their assets against market. In fact, one in ten (10%) investors say they don't know or aren’t sure if they have a market risk protection strategy at all.

Having a strategy is one thing. Understanding how it's designed to support your retirement goals is another. It can help you separate changes that may require action from those that simply call for patience.

What to do when the future feels uncertain

While no one can predict exactly what the economy or markets will do next, you can take steps to help keep your retirement plans on track. Here are a few places to start.

Start with your goals—not the headlines. Before making major changes to your investments, ask yourself whether your retirement goals or timeline have actually changed. If they haven't, your current strategy may not need dramatic changes either.

Focus on what you can control. You can't control inflation, market performance, or economic policy. But you can control how much of your income you choose to save, whether your investment mix still reflects your goals and comfort with risk, and whether you're consistently working toward the retirement you envision.

Keep the bigger picture in mind. Market ups and downs are only one part of retirement planning. A well-rounded strategy should also account for rising living costs, healthcare costs, taxes, and other retirement expenses.

Give yourself time before making major decisions. Market swings can be uncomfortable, but they aren't a reason to abandon a well-thought-out retirement strategy. Taking time to review your plan can either confirm you're already on the right path or help you identify thoughtful adjustments that better support your long-term goals.

Don't hesitate to ask for guidance. If you're unsure whether your current strategy still reflects your goals or you're facing decisions you haven't encountered before, talking with a financial professional can help you evaluate your options, put current market conditions into perspective, and make informed decisions with greater confidence.

Confidence comes from preparation, not prediction

You don’t have to navigate economic uncertainty alone.

Whether you're reviewing an existing retirement strategy or wondering if it's time to create one, a financial professional can help you evaluate your options, put today's economic environment into perspective and determine what, if any, changes make sense for your individual situation. Depending on your goals, that conversation may also include strategies such as annuities and other guaranteed income solutions that may help address certain market risks while supporting your retirement income needs.

With the right strategy and guidance, you can move forward with greater confidence, knowing your retirement plan is built to adapt as life and the economy evolve.