Could economic uncertainty derail your retirement plans?

Periods of market turbulence often bring a familiar wave of anxiety, particularly for those nearing retirement. When the headlines turn bleak and portfolios wobble, it’s natural to worry whether years of careful planning might be undermined by short-term volatility.

But the truth is, economic uncertainty doesn’t have to destroy your retirement plans. In fact, with a clear strategy and the right mindset, it can become just another phase in your long-term journey.

Here, we look at some of the core concepts of creating a strategy that’s designed to work with market volatility, and help you enjoy your retirement years regardless of the day’s headlines.

One of the biggest misconceptions around retirement is that your investment horizon suddenly shrinks the day you stop working. Inflation doesn’t stop when retirement hits, so in order for you to achieve as much longevity from your funds as possible, investing is still important to combat the impact of this inflation.

Most people entering retirement still need their money to last 20, 30, or even 40 years. That means your portfolio still needs to grow, and you’re still an investor with a long-term outlook.

Every bout of market volatility comes with a narrative that makes it feel unique. Whether it’s a pandemic, geopolitical conflict, or a sudden economic downturn, the circumstances change, but the pattern doesn’t. Markets fall. Sentiment turns negative. And then, in time, markets have always recovered.

Experienced investors know this cycle well. They’ve seen it through the dotcom bust in the early 2000s, the 2008 financial crisis, Brexit, Covid and more. The current moment may feel exceptional, but history reminds us it probably isn’t.

The instinct to move into cash when markets fall is understandable, but often counterproductive. Selling during downturns can crystallise losses and lock you out of any subsequent recovery. Missing even a handful of the best days in the market can significantly reduce long-term returns, and these best days almost always occur in close proximity to some of the worst.

We don’t need to go back too far to see an example of this. The Trump tariffs have caused widespread volatility in recent weeks, with global markets falling substantially on the announcement of blanket US tariffs and subsequent escalating trade tensions.

In amongst all that volatility, the S&P 500 experienced its biggest one day gain since 2008¹, climbing 9.5% in a single session on 9 April 2025.

That’s why one of the key principles we emphasise, especially in times like these, is the preservation of capital through long-term thinking, not knee-jerk reactions. Often, the best course is to sit tight and look for opportunities rather than retreat.

That’s not to downplay the fact that the short-term may feel overwhelming. Feeling anxious, nervous, or uncomfortable is completely normal. But these emotions don’t require a change of plan. They just need perspective.

One of the ways to make it easier to maintain this perspective is to ensure you have a plan in place for your short-term cash needs, as well as your long-term investments.

Understandably, those about to retire feel particularly exposed during periods of uncertainty. But here, planning makes all the difference.

At Evelyn Partners, we advise clients to hold a sufficient cash buffer to cover typically 6 to 12 months of expenses, or more depending on your individual circumstances. For those already in drawdown, we might extend this to cover up to two years’ worth of spending. This reserve gives you the flexibility to pause withdrawals from invested assets during downturns, buying time for markets to recover.

The key is that the plan should not rely on dramatic changes in response to short-term events. Instead, it’s built to be resilient, with contingencies that allow you to stay invested and focused on your long-term goals.

Retirement planning is as much about confidence as it is about numbers. When uncertainty creeps in, it’s easy to second-guess your strategy. That’s why we always encourage clients to pick up the phone if they’re feeling anxious or unsure. A conversation with your adviser can provide reassurance, context, and clarity.

Because ultimately, retirement success isn’t about predicting markets. It’s about having a plan that’s flexible, grounded in reality, and able to weather whatever comes next.

¹ Reuters Wall Street rebounds sharply after Trump announces 90-day tariff pause, 9 April 2025