Tariffs & Retirement Readiness: What People Leaders and Plan Sponsors Need to Know

How do tariffs affect your workforce—and their financial future?

Last week, Newfront partnered with BlackRock to host a happy hour in Midtown Manhattan, where HR leaders and industry professionals gathered to discuss the potential impact of tariffs on retirement readiness.

We were grateful for the opportunity to bring together such a thoughtful group to explore this timely and complex issue. Here are a few key insights from our conversation:

Market Trends & Tariff Impacts

• Active Management in Uncertain Times: BlackRock's target date funds are designed to provide more active management during early news cycles and transitional periods, shifting the burden of market response from employees to experienced managers.

• Shifting Market Flows: In early 2025, outflows from U.S. equity markets to Europe began to rise, reversing a decade-long trend of global capital favoring large-cap U.S. growth companies.

• Volatility & 401(k) Behavior: Markets often react negatively to tariff announcements or trade tensions. In fact, 401(k) participant trading reached record highs in 2025, posing new challenges for plan sponsors.

Industry-Specific Risk

Industries with global supply chains—such as technology, automotive, and manufacturing—are particularly vulnerable to tariffs. The resulting higher costs can lead to:

• Reduced corporate profits and stock prices

• Lower dividends, diminishing fund performance

• Inflation-driven interest rate hikes, which reduce bond values

• Declines in investor confidence, slowing long-term growth

What Investors Can Do

HR leaders and employees alike can take proactive steps:

• Stay Diversified: A well-balanced mix of asset classes can help buffer specific tariff-related shocks.

• Think Long-Term: Avoid panic-selling in reaction to short-term volatility.

• Consider Target Date Funds: Instead of selecting individual stocks or index funds, using target date funds can provide professionally managed strategies aligned with long-term retirement goals.

Want to learn more about helping your employees navigate volatile markets? Connect with our experts at Newfront.

Newfront Retirement Services, Inc. is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration as an investment adviser does not imply any level of skill or training, and does not constitute an endorsement by the SEC. For a copy of Newfront Retirement Services disclosure brochure, which includes a description of the firm’s services and fees, please access www.investor.gov.

Investing involves risk, including possible loss of principal. Asset allocation and diversification may not protect against market risk, loss of principal or volatility of returns.

The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by Newfront to be reliable, are not necessarily all inclusive and are not guaranteed as to accuracy. Past performance is no guarantee of future results. Reliance upon information in this material is at the sole discretion of the reader.