Your retirement nest egg might need a harder shell than you thought. According to Yale’s Budget Lab, tariffs could cut average household income by $2.8K in 2025, a blow that could land the hardest on retirees living on fixed incomes. And while Americans have mostly been spared from the sting on their wallet so far, that cushion is vanishing fast — leaving retirees exposed to a surge in prices and the market chaos that follows.

• Retirees over 70 represent the fastest-growing group of borrowers, with debt rising more than 36% in five years as they struggle to maintain living standards amid persistent price pressures.
• American confidence in a comfortable retirement fell from 43% to 34% in a year, thanks to inflation fears, while Vanguard reports hardship withdrawals rose to 4.8%.

The silver lining strategy: Despite the headwinds, financial experts recommend staying the course with diversified portfolios rather than panic-selling during volatile periods. Treasury Inflation-Protected Securities (TIPS) may not provide the usual hedge this time since markets are already pricing in substantial increases, prompting some strategists to suggest small allocations to emerging market bonds instead. The key is determining your financial cushion — if you’ve got adequate reserves, don’t let sticker shock derail those retirement dreams you’ve been planning for decades.