How to stress-test a retirement plan against tariff-driven inflation

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Financial planner Dr. Guy Baker describes walking a retired couple through a tariff-inflation scenario: instead of moving to cash, he re-ran their spending projections using a 5% inflation rate for four years rather than three. The impact on their plan was negligible because their income came from Social Security, a pension, and a bond ladder — none of which depend on stock prices. Their equity holdings were earmarked for discretionary spending and heirs, giving them years to recover if markets fell. Baker argues that showing clients how their specific plan holds up under stress does more to calm fears than any market forecast, and that most tariff anxiety is really anxiety about financial security in disguise.

For anyone reviewing their own situation, Baker recommends four checks: (1) run cash-flow projections at 4–5% inflation to see whether spending adjustments would be needed; (2) audit sector concentration for heavy exposure to import-dependent industries such as electronics, autos, apparel, and agriculture; (3) consider that court-ordered tariff refunds could benefit beaten-down sectors, so selling them at lows may be premature; and (4) if the portfolio is broadly diversified, stress-test results may be all that is needed — followed by a conversation about whether risk allocation still fits the plan.