I'm 54, have $110,000 in a 401(k) and I'm scared about Trump's tariff threats — how can I protect my little nest egg as best as possible?

A possible trade war

This year feels like a dramatic time for the markets given the flow of news coming out of the White House. Even though President Trump backed off on imposing wide-ranging tariffs on Mexican and Canadian goods for 30 days in early February, the U.S. still faces a possible trade war on both fronts.

On Feb. 10, he set tariffs for aluminium products at 25%, prompting condemnation from the European Union. And after Trump imposed a 10% tariff on goods imported from China (some of which have been paused), China retaliated by slapping tariffs on products such as U.S. crude oil and liquefied natural gas products.

All of this sounds scary, but events like these don’t always affect the market in the way you might think. While the impact the tariffs will have on businesses remains to be seen, the markets will continue to fluctuate as always.

You and your employer’s contributions to your 401(k) will likely continue, and other factors such as your portfolio allocation will also affect how your investments grow.

The truth of the matter is that you may not have a lot of control as to what will happen to the economy and, by extension, the markets. But there are steps you can take to protect what you already have invested.

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Protecting your nest egg

Focusing on what you can control is the best move you can make to protect your nest egg. Keeping your debt as low as possible will help you reduce what you need to spend during retirement. Be prepared to adjust your budget in retirement as well, since certain work-related expenses, such as transportation, may become less of a priority.

Contributing more can also help. Take a look at your current spending to see if you can reasonably afford to put more toward your 401(k). Have you contributed enough to max out your employer match? If not, use that as your initial goal. Eventually, you may want to work your way up to contributing the maximum amount each year.

Adjusting your portfolio allocation could make sense and is something that should change as you get closer to retirement. For example, someone younger may be fine with having more stocks in their portfolio as they have a longer time horizon. Those nearing retirement, however, may want to consider moving toward more conservative investments like bonds. Any money kept in stocks should also be diversified.