Personal Finance

We're in our 40s and have saved millions but the political climate is making us nervous - will our nest egg be enough?

Maurie Backman

Published: March 17, 2025 8:59 am

Today’s political climate is an interesting one, and it has a lot of people worried about the economy. As it is, tariff policies have already had a huge impact on the stock market. And a lot of folks are now worried about a recession.

If you’re in your 40s, you may be worried about the impact of a stock market event on your nest egg — even if you’re not planning to use that money for a good number of years. And that’s understandable.

But what if you’re planning to retire sooner? That changes things considerably.

In this Reddit post, we have someone who’s concerned about a stock market crash upending their early retirement plans. And while that’s a valid concern, there are ways to work around it.

Don’t let economic upheaval wreck your plans

You can potentially write off a stock market decline as a non-event if you’re in your 40s and aren’t planning to retire for another 20 years. But if you’re in your 40s with millions saved, you may be thinking of retiring in the next year or two. And in that case, a market crash could very much upend your plans.

That’s why you need to make sure your portfolio is allocated appropriately for where you are in your retirement journey. Don’t focus on your age so much as how far away from retirement you are.

Someone who’s 63 with plans to retire at 65 should scale back on stocks and move some of their money into assets that are more stable, like bonds. If you’re 43 with plans to retire at 45, you should do the same.

You can’t afford to have the bulk of your portfolio in stocks at a time when you’re planning to take withdrawals. That’s just not safe.

It’s also important to diversify within the stock portion of your portfolio. You may be inclined, for example, to jump on the tech bandwagon. But having a large concentration of stocks in any single sector of the market is not a good thing at all.

Talk to a financial advisor for help

It’s hard to know what will become of the economy on a near-term basis. And it can be nerve-wracking to sit back and watch things unfold, knowing full well that economic events could mess with your retirement plans.

That’s why it’s so important to talk to a financial advisor. A financial advisor can help you assemble a portfolio that’s designed to withstand a market downturn. They can also help you load up on assets that give you access to the income you might need to pull off an early retirement while gaining the right amount of protection in your portfolio.

That said, if the economy does take a turn for the worse and your portfolio value declines quite a bit, you may want to put off early retirement until things stabilize. That may not be ideal. But if you’re in your 40s, you should have the option to keep working for a few more years and still have a very lengthy retirement ahead of you to look forward to.