Markets may feel a bit steadier, but don’t mistake this moment for stability. After the recent chaos, investors are breathing a little easier. But, I wouldn’t say we’re out of the woods. More likely, we’re experiencing a temporary reprieve.

President Trump’s recent 90-day pause of his so-called “reciprocal tariff” plan was his first sign of retreat. Stories are now floating around that he might just lower tariffs on China – from ridiculous levels to merely too high. And, he has also signaled a willingness to talk to Chinese President Xi, but only if he calls him first. Adding to the sense of calm, Trump has also suddenly decided to tone down his antagonism toward Federal Reserve head, Jerome Powell. This was just days after calling him a “major loser” on social media.

Of course, none of these reversals were rolled out as a formal shift in policy. Instead, they’ve come in the form of hints, rumors, offhand remarks and social media posts – leaving everyone to decipher the White House’s true intentions in real time. These childish guessing games have tangible, economic consequences.

The markets’ sense of relief started when Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick reportedly found a way to literally sneak into the Oval Office. Their goal was to get President Trump to at least pause his new tariff “policy.” The sneaking around was apparently necessary to get Trump’s influential trade adviser, Peter Navarro, out of earshot. Their clandestine effort smacks as a desperate maneuver. Moments later, Bessent and Lutnick waited in the room while President Trump walked back his tariff plan via a social media post. The mere image of this intervention is unsettling.

The policy in question – vaguely defined “reciprocal” tariffs – was never truly about reciprocity. Instead, it relied on a crude formula that no serious economist could defend. This entire episode highlights a governance style that appears impulsive, unthoughtful and reactive. Business leaders are left to guess what policy will look like a week from now. It has layered on a level of uncertainty that risks a recession.

Markets can handle policy changes. They can even handle reasonable unpredictability. But, when rules shift with little notice and policies lurch between extremes, the trust that underpins our markets erodes. The notion that Bessent and Lutnick are holding back the erosion of terrible decision making is concerning, to say the least.

While the “adults in the room” appear to have taken charge – for now – it’s unclear how long it will last. For this reason, now might be a good time to review your portfolio. If the past month has prompted feelings of regret for not paying closer attention to your investments, this period of calm might be a second chance. Because, in this environment – and with the current occupant of the Oval Office – it’s rarely about if the tone will change, but when.

As everyone knows by now, markets are experiencing extreme volatility. Over the past ten days, stocks have dropped considerably. The selling has been a global affair. Perhaps most notably, US government bonds have failed to offer their usual safe harbor. Investors have sent a clear sign of a loss of confidence.

The proximate cause was President Trump’s decision on April 2nd to impose blanket tariffs on virtually every other country on the planet. While we all knew some tariffs were in the offing, the specifics of his policy were a huge surprise. His process, methods and decisions were widely viewed as shockingly uninformed. The policy simply ignored the deep complexity and inherent interconnectedness of global trade. Once the details were fully analyzed and absorbed, it became clear President Trump’s tariffs lacked a foundation in sound economic thinking and risked a recession.

Big money players quickly voiced concerns. Piles of CEOs and investors questioned whether the Trump administration even understood what it was doing. Naturally, White House officials made the rounds in the media, defending his tariffs in ways that further strained credibility. Over time, their arguments appeared increasingly disconnected from the reality unfolding in the markets.

Thankfully, the backlash was intense. Under mounting pressure, President Trump finally reversed course and announced a 90-day pause in the tariffs. The White House called it “his plan all along.” They now claim he was just trying to bring other countries to the negotiating table. Of course, if the tariffs were just his tactic to gain leverage, pausing them at the drop of the hat and declaring victory is almost laughable. Are we really to believe that he relinquished his leverage just because an undisclosed number of countries have supposedly reached out to talk? There were many, less damaging ways to start a conversation. Thoughtful people know President Trump buckled to immense pressure and was offered an “off ramp” to save face.

Now, the timeline of his announcement of his tariff “pause” raises some serious questions. Media sources reported last Monday morning that such a pause was in the works. Stocks vaulted within minutes. The White House quickly declared those reports to be “fake news.” Promptly, stocks resumed their slide. Then, only two days later on Wednesday morning – hours before making his public announcement – President Trump posted on social media that it was “a great time to buy.” He later admitted his decision to pause tariffs was made that very morning. Piecing this timeline together, it’s quite clear that President Trump publicly encouraged people to buy stocks – and, it is important to remember for every buyer, there is a seller – while he sat on market-moving information that he alone controlled. This is a disturbing breach of the public’s trust.

Sadly, this entire episode – and continued escalations with China – is yet another stark reminder of the need for Congress to reassert its constitutional authority. If our lawmakers don’t step up and do their jobs – soon – they share responsibility for what happens next. Have they not yet seen enough?

Q: I’m pretty close to retirement and hearing about a possible recession due to tariffs, and government cuts has me feeling nervous. Should I just move everything to cash?

A: It’s a natural instinct to act when things feel this uncertain. Doing something can feel better than just sitting still. But, it often backfires when you act on fear.

It’s important to remember that markets are forward-looking. Today’s stock prices already “price in” a wide set of possible future outcomes. This includes many of the things currently making headlines. Moving to cash is a tough decision on many levels. There is a high probability that you are the batter swinging at a pitch after the umpire has already called a third strike.

Your portfolio should be built around a longer-term financial plan. It’s smart to remove the emotion. Your plan should be built around some key pillars. I’m referring to things like solid diversification, a proper balance between stocks and bonds, and a clear understanding of your own appetite for risk.

Diversification means not having too much exposure to industries vulnerable to tariffs. A balanced portfolio means you hold some riskier assets, like stocks, and you also have more stable ones, like bonds. In the end, your financial plan should already account for some volatility. It shouldn’t require adjustment every time the market gets rattled. The bottom line is, when markets are shaky, it’s smart to revisit your plan, not abandon it.

Q: With the IRS being gutted, my husband thinks it’s safe to say there will be fewer audits. He’s thinking we could just skip filing our taxes this year. We are both pretty sickened by what we’re seeing coming out of the White House. But, what are the real risks here?

A: With everything that’s going on today, finding a way to protest is your absolute right. But, I wouldn’t do it this way. This is not the type of “good trouble” you want to find yourself in!

The IRS gets mountains of data on you. They know a lot about your tax picture, with or without your tax return. Employers, brokerage firms and banks file tax forms, among other sources. Their computer systems fully ingest all of this tax data on you.  If you don’t file your taxes at all, that missing return waves a massive red flag. When their computers spot an inconsistency, they’ll almost certainly send you a notice – sometimes a couple years later – demanding a tax payment along with interest and penalties.

The penalties can be harsh. If they determine you owed them money, and you never filed, the IRS hits you with failure-to-file penalties, failure-to-pay penalties, plus interest on both. And, that’s before mentioning possible accuracy-related penalties if you understate your income by too much. All of this can pile up quickly. Tax evasion is just an unwise form of political resistance. It’ll likely cost you more than you think.

There is a time to speak up.

Democracy and capitalism rely on strong institutions, a true balance of power and clear policies. Elon Musk’s inflammatory actions and President Trump’s chaotic approach have created needless uncertainty. Some might view their tactics as bold. In my view, they are absurdly dangerous. Disruption without public discourse weakens our institutions and our economy.

Our institutions must be defended before they erode further. Musk’s DOGE, an unaccountable entity, has gained access to our nation’s payment systems and the personnel files of millions of government employees. It raises legitimate questions of their true intent. I can assure you, this has created concern for many retirees.

Meanwhile, policy shifts by President Trump are creating mayhem. His wildly confusing tariffs policies, his and Musk’s attempts to gut the federal workforce, his threats to annex and abandon other nations and his slew of orders designed to deepen public divisions are prime examples. While certainly not my only concern, these actions lower confidence and ripple through financial markets.

Trade tensions will disrupt global supply chains and damage our international relationships. Tariffs will raise consumer prices and invite retaliation. In the background are looming threats to hamstring the Federal Reserve’s independence. This all fuels uncertainty, increases volatility, and weakens our economy. But, as we should all know by now, life is about more than money.

Our courts and the free press – key pillars of our democracy – are in the crosshairs. They act as safeguards against tyranny. President Trump’s ongoing attacks on reputable news outlets, his questioning of the legitimacy of judges, and his granting of access to fringe news sources both limit transparency and erode public confidence. Without trust in these institutions, our society is weakened.

Congress plays a critical role. So far, lawmakers appear unwilling to check President Trump’s and Elon Musk’s actions. Among other jobs, our elected officials are supposed to slow things down and ensure that policy changes are seriously considered. When they meekly sit on their hands – fearing their positions more than the lives (and livelihoods) of the people they were elected to serve – the door is open for lasting harm.

Beyond just voting, we also play a critical role. We all share the responsibility to engage in thoughtful discussion, demand transparency, and hold leaders accountable. But, without strong institutions, far too much damage can be inflicted between election cycles. Remaining silent and hoping others will say or do something is a natural instinct. However, history shows that silence is the lifeblood of authoritarians.

This is not about politics. My point is much broader. We should all be able to agree on the importance of stability, respect, fairness, and protecting our institutions. What we are all witnessing should get our attention. It’s time to speak up.

Q: My husband didn’t work last year, but we’d like to contribute to an IRA for him to lower our taxes. We’re in a higher-than-usual tax situation this year. Is this allowed? Also, I participate in a retirement plan at work. Does that change things?

A: Yes, you can contribute to his IRA even though he didn’t work. It’s called a spousal IRA. His contribution limit for tax year 2024 is $7,000, plus an additional $1,000 “catch-up” contribution if he’s over 50. You have until tax time to make his contribution.

Whether his contribution is actually tax-deductible will depend on your family’s overall income. Since you are in a retirement plan at work, it affects the deductibility of his IRA contribution. For 2024, for married couples the deduction is fully phased out at $240,000 of adjusted gross income.

If you exceed this income limit, you can still make a contribution for him, but it would be non-deductible. To better plan for this year, you might double check to see if you are actually maxing out your own retirement plan contributions.

Q: We had a big income year in 2024, but 2025 will be much lower. We don’t think we need to make estimated tax payments this year based on last year’s income. How do we make sure we pay the right amount and avoid any penalties this year?

A: The IRS’ estimated tax rules offer flexibility, but getting it right takes some work.

To avoid penalties, you need to meet a “safe harbor” rule. One option is to pay 100% of last year’s tax liability (or 110% if your adjusted gross income was over $150,000). Since your 2024 income was high, this could cause you to pay way too much tax along the way. With interest rates on savings still pretty attractive, letting the government have that money ahead of time isn’t the smartest move.

A second option is to pay at least 90% of your actual 2025 tax liability. This avoids overpaying but it does mean you’ll have to do some tax planning throughout the year. If your estimated tax payments end up being too low, you could get hit with a penalty.

If you’re retired, it might make sense to adjust your tax withholding on your IRA withdrawals or even your Social Security or pensions payments instead of making estimated payments. The IRS treats this type of tax withholding as if it were paid evenly throughout the year. This way, you can wait until later in the year to do your tax projections, rather than make those large tax payments during the year.

While it can be a pain, checking your numbers throughout the year and making adjustments will help. It’s far less of a pain than paying those underpayment penalties!