The turmoil in the stock markets over the past two weeks has put many Americans on edge, especially those nearing retirement.
Things have settled somewhat since April 9, when President Donald Trump declared a 90-day pause on many of his proposed tariffs, explaining that people were “getting a little yippy.”
Still, the Dow Jones Industrial Average closed at 40,525 on Monday, down nearly 1,500 points from the beginning of the month, and many Houstonians have seen corresponding declines in their 401(k)s and other investments.
Even before this month’s events, many Americans were feeling less than confident about their financial outlook, according to Thrivent, a national not-for-profit financial services organization headquartered in Wisconsin.
A new survey from the organization, released in February, found that 53% of Americans and 57% of Houstonians are “very” or “somewhat” worried about their ability to retire when they want.
At the same time, just 28% of respondents across the nation, and 34% of Houston respondents, said they were saving for retirement.
The survey included about 2,200 respondents from across the country, and an oversample of around 1,000 in Houston.
Here are some key tips financial planners offer their clients in Houston.
Stay calm
While it may be normal enough to get a touch of the “yips” now and then, experts say it’s best not to let fear shape your long-term financial planning.
“We try to let clients know that panic is never a strategy,” said Tricia Preston, a vice president and senior financial consultant at Charles Schwab in Houston.
“We know that the environment is always changing,” said Sofia Hernandez, a Houston financial adviser with Thrivent.
“What I say to my clients is that it is very important to stay patient, and not let emotions get the best of people.”
Have a plan
Both Preston and Hernandez emphasized the value of working with a professional to develop a plan, even if you don’t necessarily have a large income or complicated investments.
“You will be more successful in the future if you do that,” Preston said.
Hernandez noted that Thrivent’s studies have found that nearly half of millennial and Generation Z respondents get their financial advice from family and friends rather than professionals, an approach which can have its pitfalls, especially given the rise of social media.
“We have seen, with new generations, a vulnerability to go for tips that maybe are not appropriate, that you just saw on TikTok,” she said.
Build an emergency fund
Hernandez said she suggests clients focus on building an emergency fund as soon as possible, with a goal of covering three to six months of expenses if necessary.
“Rain is coming for all of us.
The difference is who is ready, and who is not,” Hernandez said.
“When people have an emergency fund, that provides security, reduces stress and ensures that they are more prepared for unexpected events and expenses.”
Preston recommends clients nearing retirement prioritize amassing a larger sum of liquid assets, so that they can cover expenses for a longer period if necessary.
They should also remain sanguine in the face of market upheaval, such as the current one.
“When you’re going into retirement, I always tell clients to have at least two years in cash and short-term investments,” she said.
“That way, when you see this, you don’t have to be concerned.”
Continue — or start — saving for retirement
Although it is hard to watch investments decline, Preston said, times of market turmoil can be a good time to save for retirement, particularly if you’re far from your expected retirement age.
History shows that markets recover from downturns, even if it takes several years.
“You need to make sure you are saving money when the market is down, because you’re buying shares, and those shares are going to go up and down, but compound interest works, it’s math, and it’ll grow over time,” she said.
Hernandez observed that even if you are close to retirement age, it is important to keep the big picture in mind.
After all, your retirement could last for 20 or 30 years.
“It is very important to have a long-term approach and take actions in the present for creating a future,” she said.
“We are creating a future all the time, but the decision on how to create it has to be today.”
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