April 5, 2025
Funds

Seattleites react to stock market slide as retirement funds take a hit


The stock market continued its downward spiral Friday, sparking concern for people across the country as they watched their retirement funds plunge in value.

The drops, caused by growing trade tensions between the U.S. and other countries, wiped out $6 trillion in stock value as of the week’s end. President Donald Trump on Wednesday announced sweeping global tariffs; on Friday, China announced retaliatory tariffs, landing another blow to Wall Street.

The S&P 500 fell 6% Friday, the Dow Jones Industrial Average 5.5% and the Nasdaq composite 5.8%. This week’s drop in the Dow is the biggest since 2020.

For David Chaffin, 64, the news has made it hard to sleep this week. The Ballard resident had planned to retire in August. Now this plan is up in the air. Since the beginning of this week, his retirement savings account has fallen by $40,000 in value. He’s worried that the losses will continue to compound as the tariffs take effect.

“I’m kind of gloomy about what it’s going to look like further down the road,” he said.

Across the Seattle area and the nation, people are struggling to understand how the staggering stock market slide will affect their everyday lives and financial futures. Analysts at JPMorgan raised their recession risk forecast this week. Distress among Wall Street traders over the past few days has also heightened fear among the general public that the stock market’s plunge isn’t over.

In times of economic instability, financial experts typically urge calm, pointing out that markets almost always trend toward gains in the long run despite occasional short-term dips.

Older people and those close to retirement aren’t feeling assuaged.

Chaffin is now considering delaying retirement by a few years. He wants to avoid withdrawing money from his 401(k) in a downturn because that would reduce the amount of money he’d have to rely on later in his life. He also doesn’t want to start collecting Social Security just yet, because waiting translates into higher payments. And if a long-term trade war is ignited, Chaffin doesn’t want to feel squeezed by inflation on a tighter retirement budget.

Chaffin and his husband are talking about scaling back on spending, eating at restaurants less and potentially canceling the Alaskan cruise they’d booked for the summer.

“I don’t want to be in a position where I’m impoverished at the very tail end of my life,” he said.

Joel Chapman, 52, started the week feeling a sense of dread.

Chapman worked at Amazon for a decade until 2022. In that time, he lived a frugal life with the intention of retiring early. He dreamed of buying some land outside the city, raising some chickens and enjoying retirement with his 7-year-old English bulldog, Sadie.

The bulk of his retirement savings comprises the stock options he received as part of his compensation at Amazon. While Chapman spoke with The Seattle Times on Friday, he checked the value of his stock options on his phone. Over the past two months, they’d lost north of $100,000 in value. By the end of the week, the share price for Amazon was down 9% from opening on Wednesday.

“We don’t know when this is going to rebound, so it’s a little bit scary,” Chapman said.

Originally, he’d planned to cash out a bit of his stock options this year to help pay off his mortgage. Those plans are on hold. Instead, he’s begun to reevaluate how he spends money and started saving for groceries and bills.

Financial advisers in the Seattle area said they have been fielding worried calls from clients since the tariff announcement.

They emphasized that periodic downturns are to be expected when it comes to the stock market, citing other major financial events including the crash in the early months of the COVID pandemic.

“Just because the market’s off at the beginning of the year doesn’t mean that if you stay invested throughout the whole year, it’s going to be down,” said Aaron Terwedo, a financial consultant based in Edmonds. For people who need money in the short term, Terwedo recommends setting aside some cash that’s available for use so that they don’t need to dip into retirement funds.

Financial advisers also recommend against panicking during downturns, especially if you’re younger. Staying the course over decades will typically leave people better off, regardless of crashes.

Daniel J., 60, a business owner in Seattle, hasn’t touched his retirement fund. But he manages his parents’ retirement accounts, and in March, he decided to pull their money out of the stock market.

“It was a gut feeling,” he said. Daniel requested that his full last name be withheld due to the sensitivity of talking about his parents’ savings.

Daniel’s parents are in their 80s and have about $1.3 million saved for retirement. Had Daniel not pulled the money out of the stock market, their nest egg would have lost $100,000 in value this week, he estimated. A loss of that magnitude could mean the difference between being able to afford their retirement home — and not. “We can’t afford that kind of risk.”

Others aren’t alarmed by this week’s news. Gene Peterson and his wife are retirees in their mid-70s. Their retirement portfolios were hit, but not to the same extent as major stock market indexes thanks to diversification.

“What’s going on in the financial market is beyond anyone’s control,” Peterson said. “The best that I can do is be chill.”



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