After the latest stock market volatility, many Americans are feeling stressed about the future of the U.S. economy and their finances.  

That uncertainty can be even more unsettling for near-retirees who are preparing to leave the workforce and tap portfolios for living expenses, experts say.

To that point, your first five years of retirement are the “danger zone” for tapping accounts during a downturn, according to Amy Arnott, a portfolio strategist with Morningstar Research Services.

If you take assets from accounts when the value is falling, “there’s less money left in the portfolio to benefit from an eventual rebound in the market,” she said. 

Some 4.18 million Americans in 2025 are projected to reach age 65, more than any previous year, according to a January report from the Alliance for Lifetime Income.  

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However, that could include additional diversification, depending on your risk appetite and goals, experts say.

Alternatively, if you’re struggling with the latest market drawdowns, you may prefer a more conservative allocation, Baker said.

“This is a good time for a temperature check” to make sure your portfolio still matches your risk tolerance, he added.

Typically, it’s best to avoid selling investments when the stock market is down, especially during the first few years of retirement, experts say.

The phenomenon, known as “sequence of returns risk,” shrinks your nest egg early, which hurts long-term portfolio growth when the market rebounds, research shows.

CFP Malcolm Ethridge, founder of Capital Area Planning Group in Washington, D.C., suggests keeping two years of income in cash within a couple of years of your planned retirement date.   

The strategy protects from early losses because retirees can tap cash reserves for living expenses while their portfolio recovers, he said.

There’s also a “psychological aspect” because the cash provides confidence to spend portfolio assets, which “sets the stage for the rest of retirement,” Ethridge said.

Amid bond market volatility, older investors may also consider building a bond ladder to provide portfolio income, said Alex Caswell, a San Francisco-based CFP at Wealth Script Advisors. 

This investment strategy involves purchasing a range of shorter-term Treasuries with staggered maturity dates, providing a steady income stream while managing interest rate risk, Caswell said.

For example, you may invest in Treasuries that mature every six months or one year for up to five years. Some investors also use the ladder method with certificates of deposit, he said.   

The maturing bonds or CDs offer “an extra layer of emotional comfort and stability for clients, especially those just entering retirement,” he said.   

Weary consumers, already grappling with high prices, now face an added potential risk: stagflation.

Stagflation — an economic term used to describe a combination of rising inflation, slower economic growth and high unemployment — may be on the horizon, according to economists.

“The Trump White House tariff policy has certainly increased the risk of both higher inflation and lower growth,” said Brett House, professor of professional practice in economics at Columbia Business School.

The Trump administration’s tariff policies are fueling stagflation conditions, according to the latest CNBC Rapid Update, which averages forecasts from 14 economists.

“It’s a more pronounced risk than at any time over the past 40 years,” said Greg Daco, chief economist at EY Parthenon and vice president at the National Association for Business Economics.

Uncertainty is already showing up in consumer confidence, said Diane Swonk, chief economist at KPMG.

“We’re seeing that kind of whiff of stagflation, where people are less secure about their jobs and they’re more worried about inflation down the road,” Swonk said.

The 1970s-era stagflation is often associated with major oil price increases, leading to shortages and long lines at gas stations. However, some economists have argued it was actually monetary fluctuations that prompted stagflation.

The conditions prompted then Federal Reserve Chairman Paul Volcker to implement a dramatic tightening of monetary policy in the late ’70s and ’80s known as the “Volcker shock.” While inflation did come down as the Fed pushed interest rates higher, the central bank’s moves also prompted a severe recession — often defined as two consecutive quarters of negative gross domestic product growth — and higher than 10% unemployment.

Stagflation would not happen in the same way today, according to Dan Skelly, head of Morgan Stanley Wealth Management market research.

The U.S. is no longer at the whim of foreign oil, Skelly said. Moreover, unions, which prompted wage price spirals back then, are no longer as big a portion of the private work force today, he said.

The uncertainty around tariffs may affect corporate and consumer confidence, which would prompt spending and investment to slow, Skelly said. The likelihood of the growth slowdown part of stagflation is fairly high, he said.

However, Skelly said Morgan Stanley expects to see more effects in the stock market through earnings than in the economy.

Many firms are revising their economic forecasts, including the possibility of a recession, as a result of Trump administration policies, according to a new survey by Chief Executive.

Stagflation is not necessarily accompanied by a formal recession; rather, it can be slowing or stagnant growth, House said.

KPMG’s current forecast expects a shallow recession, with inflation peaking at the end of the third quarter.

“It’s not even what we saw during the pandemic,” Swonk said of the inflation spike. But it would be enough for employment to slow and to prompt a mild bout of stagflation, she said.

Stagflation, if it happens, would be the “worst of both worlds,” with higher unemployment and costs, Daco said.

“That represents a significant hardship for many families and businesses across the country,” he said.

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Instead of overstretching their budgets with purchases, consumers should prioritize paying down high-interest credit card debt and building up an emergency fund. Focusing on high-interest debt first can save money in the long run, and having an emergency fund provides a financial safety net.

Experts generally recommend having at least six months’ expenses set aside. While it can be difficult to sock away extra money amid higher prices, the good news is higher interest rates are still providing inflation-beating returns on cash through online high-yield savings accounts that are FDIC-insured, Foster said.

For those who have been keeping cash on the sidelines rather than investing, now is the time to start allocating toward equities and riskier assets, considering the recent market drop, Skelly said.

“Don’t do it all in one day, but start winding down some of that cash, now that values are more fair than they were a month or two ago,” Skelly said.

Investors who have reaped big profits may want to rebalance to more neutral positions now, he said.

In 2022, one survey found 80% of economists said stagflation was a long-term risk.

But it was avoided at that time with a mix of strong economic growth, disinflation and a robust labor market encouraged by the Federal Reserve, Daco said.

Much of the risks popping up in today’s economic forecasts are the result of White House policies, economists say.

The Trump administration could reduce stagflation risks, Daco said, by reducing policy uncertainty, easing immigration restrictions that will reduce the labor supply, and not implementing tariffs on major trading partners.

House said the U.S. entered 2025 with a “well-performing economy,” which he said has been threatened by the Trump administration’s recent policy changes. It is up to the administration to unwind those policies and “prevent stagflation from occurring,” he said.

The White House did not respond to a request for comment from CNBC.

The IRS’ free tax filing program is in jeopardy as the agency faces continued cuts from the Trump administration.

After a limited pilot launch in 2024, the program, known as Direct File, expanded to more than 30 million taxpayers across 25 states for the 2025 filing season.   

Funded under the Inflation Reduction Act in 2022, the program has been heavily scrutinized by Republicans, who have criticized the cost and participation rate. Over the past year, Republican lawmakers from both chambers have introduced legislation to halt the IRS’ free filing program.

Now, some reports say Direct File could be at risk. Meanwhile, no decision has been made yet about the program’s future, according to a White House administration official. 

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During his Senate confirmation hearing in January, Treasury Secretary Scott Bessent committed to keeping Direct File active during the 2025 filing season without commenting on future years.  

“I will consult and study the program and understand it better and make sure it works to serve the IRS’ three goals of collections, customer service and privacy,” Bessent told the Senate Finance Committee at the hearing. 

However, the future of the free tax filing program remains unclear.

As of April 17, the Direct File website said the program would be open until Oct. 15, which is the deadline for taxpayers who filed for a federal tax extension.

Many taxpayers can also file for free via another program known as IRS Free File, which is a public-private partnership between the IRS and the Free File Alliance, a nonprofit coalition of tax software companies.

The IRS in May 2024 extended the Free File program through 2029.

“No one should have to pay huge fees just to file their taxes,” Senate Finance Committee Ranking Member Ron Wyden, D-Ore., said in a statement on Wednesday.

Wyden described the program as “a massive success, saving taxpayers millions in fees, saving them time and cutting out an unnecessary middleman.”

In January, more than 130 Democrats, led by Sens. Elizabeth Warren, D-Mass., and Chris Coons, D-Del., voiced support for Direct File.

However, opponents have criticized the program’s participation rate and cost.

During the 2024 pilot, some 423,450 taxpayers created or signed in to a Direct File account. Roughly one-third of those taxpayers, about 141,000 filers, submitted a return through Direct File, according to a March report from the Treasury Inspector General for Tax Administration.

Those figures represent a mid-season 2024 launch in 12 states for only simple returns. It’s unclear how many taxpayers used Direct File through the April 15 deadline.

The cost for Direct File through the pilot was $24.6 million, the IRS reported in May 2024. Direct File operational costs were an extra $2.4 million, according to the agency.