Economic policies like tariffs can significantly affect your financial future, especially as you approach or while you are in your retirement. Recent comments by U.S. President-elect Donald Trump about placing tariffs on goods from Canada, Mexico and China have sparked some debate on both sides of the border. Regardless of whether the tariffs get implemented, they are a valuable reminder of how global events can impact the economy and your wealth in retirement.
 

What Are Tariffs and Why Should Retirees Care?
 

Tariffs are taxes on goods that cross borders and are often introduced as a trade policy tool. The proposed 25% tariff on Canadian exports into the U.S. could create serious challenges for Canadian businesses and households. A business can either take the financial hit by absorbing the cost, shed those costs in another area like labour or pass it on to the consumer in the form of higher prices for goods and services.
 

Impacts on Retirees: Beyond the Headlines
 

Tariffs don’t just affect businesses they also impact retirees directly. A few of the potential consequences include:

• Investment Portfolio Losses: Businesses absorbing tariff costs may generate lower profits, leading to reduced shareholder dividends.
• Higher Costs of Living: Increased prices on goods, including essentials, could strain household budgets.
• Currency Fluctuations: A weaker Canadian dollar can reduce purchasing power, particularly for those traveling or buying goods priced in U.S. dollars. Just the discussion of tariffs by Donald Trump affected financial markets and exchange rates.
   

Planning for the Future in a Changing Economy
 

Economic shifts like tariffs are reminders of the importance of preparing for the unexpected, especially for your retirement. While these events may be out of your control, a financial strategy can help protect your lifestyle and provide peace of mind. You'll probably need help creating a plan that accounts for your lifestyle desires as well as potential risks to help ensure your wealth lasts throughout your retirement. That is essential for long-term confidence and financial security.

PKAG can help.  Join us for one of our in-person seminars or contact us today.