Worried That Market Fluctuations Following President Trump's Tariffs Will Affect Your Retirement Savings? 3 Things to Do Now

President Donald Trump's tariffs have been a major feature of his second term so far -- and a major cause of concern for many Americans. Whether you're still working, nearing retirement, or already there, you've probably worked hard to save what you can for retirement. Fears that the new tariffs could hurt your investments can leave you scrambling to minimize the damage.

While we have no way of predicting exactly what will come next, you can take a few steps to help yourself better weather potential dips in your portfolio's value. Start with the following three actions.

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1. Make sure your savings are adequately diversified

Diversification won't eliminate your risk of loss, but it can help reduce risk. If you have a portfolio that consists of five stocks and one of them drops by 50%, that's a much more serious issue than a portfolio with 100 stocks where one drops by 50%.

Diversification means investing in at least 25 companies. It's also important to invest in different industries. Choosing 25 stocks in the tech sector may not provide you with the diversification you want if a tariff or new regulation hurts the entire industry. Some people also like to include things like gold in their portfolios because its value often moves in the opposite direction of stocks.

If you're uncomfortable picking stocks, you can invest in an index fund instead. These are bundles of stocks you purchase as a package. They offer instant diversification, and they often have low fees, too.

2. Keep some cash on hand if you're in or near retirement

Watching your retirement accounts lose money is tough at any age. But it's not as big of a concern for young adults because they usually have plenty of time to recover before they need to use those funds. That's not the case for older adults, so it's more important for them to keep some of their savings in cash.

This gives you a little more flexibility in when you withdraw money from your retirement accounts. You won't be forced to sell investments when they're way down because you'll already have some money on hand. You can wait a little longer until your savings hopefully rebound before you sell.

Ideally, you want to keep one to two years of living expenses in cash. You can keep this money in a high-yield savings account if you'd like so you can still earn some interest on it.

3. Stay the course

When you see your investment portfolio losing money, it can be tempting to sell quickly or stop investing new funds in the hope of avoiding further losses. But this fails to take into account that most stocks will likely rebound eventually. If you sell during the dip, you're locking in that loss. If you hold onto your investments, they might dip in value for a little while, but they could later command a much higher price than what you paid for them.

Investing while stocks are down could work to your advantage over the long run. You may be able to purchase more shares when prices are lower than you could when prices are higher. This could give you more money in the future.

Sometimes, it's important to limit how often you check your portfolio so you aren't tempted to make sudden changes. Consider checking your portfolio every few months at the most, rather than getting worked up over daily fluctuations.

If you experience a major change, like a new job or the loss of a spouse, that might be a good time to revisit your investments and possibly make some major changes. But otherwise, trust that you've taken the key steps to help your savings last as long as possible.

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