7 smart financial strategies during market volatility

Market volatility is a natural part of investing, even if it doesn't always feel this way—especially when the headlines are filled with words like turbulence and uncertainty. In these moments, it's tempting to react emotionally—either by pulling investments out of the market or ignoring your portfolio altogether.

But neither action helps build long-term success. The good news is even in unpredictable times, there are thoughtful steps you can take to regain a sense of control and keep your financial plan on track.

Recent causes of market volatility

Several recent events have caused market volatility and cascaded into our daily lives.

• Geopolitical conflicts, including wars in Asia and the Middle East, have caused instability and impacted trade. The downstream effects, such as shortages and inflation, will play out over the coming months.
• Despite the Supreme Court's recent ruling, the continuation of tariffs generates uncertainty and increased costs that are passing to consumers.
• Political changes—including upcoming midterm elections—may cause the government to be less likely to pass legislation that addresses bigger issues, while other situations like whole and partial government shutdowns continue.
• Events like the rise of AI and its impact on the labor market are being watched, but their overall impact isn't yet clear.

Financial moves to consider in a volatile market

While extra care must be taken when considering withdrawing or transferring portions of your investment portfolio, here are seven key strategies to explore with your financial and tax professionals to help you feel more confident when navigating a volatile market and inflationary environment.

1Reassess your spending priorities

As the economy shifts and prices fluctuate, you may want to have a deeper look at your spending in these key areas.

• Review your withdrawal strategy. If you rely on investment income for everyday expenses, work with your financial team to review your withdrawal strategy when the markets are down. Drawing from your accounts in the correct order can help preserve long-term value.
• Keep an eye on price increases. As tariffs and geopolitical conflicts continue to impact the price of everyday goods, pay attention to the costs of goods you commonly consume. If certain items become more expensive, consider whether you can find a lower-cost alternative or pause the expense.
• Reconsider large purchases. If you're planning a major purchase like a house, vehicle or appliance, you may want to reconsider your timeline. For example, analysts note that the prices of new and used automobiles have risen considerably—and are continuing to rise. Some analysts are estimating that they may increase between $2,000 and $10,000 due to tariff impacts and other potential shortages.
• Revisit your timing if retirement is imminent. Delaying just a few months or building a short-term cash cushion could help you avoid withdrawing from investments during a downturn and experiencing the negative impact of sequence of returns.

2Revisit your financial plan

Your financial plan is the blueprint for achieving your long-term goals. During market volatility, revisit the goals in your plan—especially your time horizon. An effective financial plan is stress-tested for unfavorable conditions. Even during short-term volatility, the long-term prospects for your plan's success often remain the same. You may need to make small adjustments, such as ensuring your emergency fund remains sufficient and adjusting the timing of big purchases.

Times of uncertainty are also a good opportunity to revisit the impact of recent retirement legislation on your retirement accounts, especially if you're working past age 70 or still planning to make IRA contributions. Changes made by the SECURE Act 2.0 and One Big Beautiful Bill Act introduced several adjustments to retirement account rules.

• Required minimum distribution age increased to 73: The SECURE Act 2.0 increased the required minimum distribution, or RMD, age to 73 for individuals born between 1951 and 1959. In 2033, it will rise to 75 for those born in 1960 or later. This extension allows more time for tax-deferred growth before withdrawals are required.
• Maximum age for IRA contributions removed: There's no longer an age limit for contributing to a traditional IRA. You can keep contributing as long as you have earned income, which is particularly helpful if you're working through this volatile period or phasing in your retirement.
• Catch-up contributions revised: High-income earners—those earning more than $150,000 per year—must make 401(k) and 403(b) catch-up contributions to a Roth account, so contributions will be after-tax.
• Super catch-up contributions increased: Those ages 60 through 63 qualify for an extra $3,250 contribution amount in addition to the regular catch-up amount.
• Qualified charitable contributions now indexed for inflation: If you're 70 1/2 or older and looking for a tax-efficient way to give, qualified charitable contributions, or QCDs, allow you to donate directly from your IRA to a qualified charity. They can count toward your RMD but aren't included as part of your taxable income. The annual limit for QCDs is $111,000 for 2026. Additionally, a one-time QCD of up to $55,000 can be made to certain charitable trusts or gift annuities.

3Consider converting to a Roth IRA

With today's market volatility and the possibility of higher future tax rates, it may be a good time to consider converting a traditional IRA to a Roth IRA. A Roth conversion means you'll pay taxes now on the amount you convert, but future withdrawals—earnings included—are tax-free.

There are several reasons a conversion may make sense now.

• Market dips mean lower cost to convert. If your IRA has temporarily lost value, converting now means paying taxes on a smaller amount, which can potentially reduce your overall tax liability.
• You may lower your taxes. Having a mix of tax-deferred and tax-free accounts in your portfolio gives you more control over how much you withdraw each year—and ultimately, how much tax you'll owe.
• You're not required to pull from it. Unlike traditional IRAs, Roth IRAs don't require you to take distributions at a certain age. This means you can maintain investments in a tax-free account, rather than being forced to transfer them to a taxable account.
• Be aware of the impact to Medicare. An Income-Related Monthly Adjustment Amount, or IRMAA, is a surcharge on high-income earners that could increase the premiums for Medicare Parts B and D. It's based on income spikes from a conversion that could impact the test—and ultimately, your Medicare premiums.
• You may see estate planning advantages. A Roth IRA can include tax-free income distributions for you and your heirs. However, beneficiaries must receive funds from an inherited Roth IRA account within 10 years.

Before converting, know that a conversion may push you into a higher tax bracket, and you can no longer undo a Roth conversion. You don't have to convert your entire IRA, though, so explore whether a partial Roth conversion fits into your strategy.

4Maintain access to liquidity with a line of credit

In a high-rate environment, stowing away large amounts of cash may feel like the right thing to do—but it could limit your portfolio's growth potential. Consider obtaining a securities-backed line of credit if unexpected expenses occur or you want to make a large purchase during a market downturn.

Having a line of credit available secured against your investments can help by:

• Preserving your long-term investment positions
• Serving as a backup emergency fund
• Avoiding a tax recognition event and capital gain taxes of selling securities
• Potentially offering competitive interest rates, even in a high-rate environment

5Reevaluate debt with today's interest rates in mind

The appeal of refinancing has increased since mortgage rates have lowered from their peak of more than 8% in 2023. Now it makes sense to explore your options. A good rule of thumb is that refinancing makes sense if you can reduce your interest rate by at least 2%. However, don't limit your review to just a mortgage. Reassess your entire debt picture, especially if you're carrying high-interest credit card balances or other nonmortgage debt.

When reevaluating your debt, consider the following key ideas.

• Focus on reducing high-interest debt first.
• Determine whether the equity you've built in your home can support your financial goals.
• Be cautious about taking on new debt that doesn't have a clear benefit.

6Review your investment allocation

If recent market ups and downs have you questioning your strategy, discuss your allocation with your financial advisor. You may benefit from adjusting your mix to better match your risk tolerance without making drastic changes to your overall plan.

7Consider down-market advantages when estate planning

If you're planning to use your annual gift tax exclusion this year—currently $19,000 per person—making gifts when asset values are lower may allow you to transfer more shares without exceeding the annual limit. This can also help you use less of your lifetime exemption for larger gifts, making your gifting strategy more efficient.

If you're a business owner who may qualify for the qualified small business stock exemption, it's a good idea to speak with an advisor about maximizing the benefit of the exclusion—including gifting business interests in stock to your loved ones.

The bottom line

While you can't control the market in volatile conditions, you can control how you respond to it. It's wise during times like these to make grounded, strategic decisions, such as leaning into your financial plan, staying diversified and speaking to your financial consultant regularly.

To stay informed on the most up-to-date market news, refer to our Market Outlook page.