Tariffs and Social Security Cuts Among Boomers' Top Worries: 2 Ways To Prepare For the Worst
Many boomers feel their finances are on shaky ground, even if they have the stability that typically comes with being a homeowner. A recent report from Point, a home equity investment platform, found that nearly half (47%) of homeowners over 60 say they feel less financially secure than they did a year ago, and 48% are uncertain about their financial situation over the next 12 months.
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Among U.S. homeowners ages 60 and older, 79% are at least somewhat concerned about the possibility of a recession in the next 12 months and 73% believe tariffs will make their financial situation worse in the next 12 months. In addition, among homeowners of all ages who currently collect or plan to collect Social Security in the next 12 months, 73% are concerned about the potential of benefit cuts.
Here's a closer look at whether these concerns are warranted, and what boomers can do now to financially prepare for the worst.
While tariff policies are constantly in flux, increased costs have already been rolling out.
'When and where we've seen the announced tariffs stick, consumer prices have started to increase,' said Aaron Terrazas, economist for Point. 'That reduces the real purchasing power of anyone who buys those goods.'
This can be particularly difficult to navigate for retirees who are living on a fixed income.
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The majority of homeowners ages 60 and above are concerned about the possibility of a recession, the report found — and it's not just boomers who have these worries.
'That is also the majority consensus among Wall Street economists,' Terrazas said. 'Of course, recessions are notoriously difficult to predict and over the past few years we've seen consistently elevated recession fears that have not yet come to pass. But even if they are just fears that never materialize, recession worries can dampen spending and investment decisions leading to slower growth, even if it falls short of an economic contraction.'
President Donald Trump has promised he would not make cuts to Social Security, but many beneficiaries are still concerned these could be on the table.
'Congress is still negotiating the details for the federal budget and possible tax legislation, so we don't yet know what changes might be included,' Terrazas said. 'In the past, direct cuts to the benefits that current Social Security recipients get are rare; more often we have seen cuts to the benefits that future recipients can expect.
'The fact that so many current recipients are concerned speaks to fragile household finances after years of high inflation and, more recently, a decline in the stock market.'
With so many unknowns, it's best to err on the side of caution and take proactive steps now to protect your finances from whatever may be on the horizon. Terrazas said the first step boomers should take is to seek professional advice.
'First and foremost, it's important to work with a financial advisor as you approach retirement to ensure that you have sufficient income if a recession were to hit or if inflation were to spike during the initial years out of the workforce,' he said.
In addition, boomers may want to reevaluate their spending.
'It may make sense to temporarily reduce spending.' Terrazas said, 'and access liquid savings to avoid drawing down asset wealth when the stock market is momentarily down.'
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This article originally appeared on GOBankingRates.com: Tariffs and Social Security Cuts Among Boomers' Top Worries: 2 Ways To Prepare For the Worst
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