Retirement Retirement Planning

Does the Iran War Have You Rethinking Your Retirement Strategy? What Experts Say About Your 401(k)

These tips will help you stay the course.

By Catherine Collins , Edited by Kristy DeSmit

Updated April 7, 2026

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Typically, the stock market does not respond favorably to global conflict. The Iran War is no different. This war has created market turbulence and is negatively affecting people's retirement accounts, which many of them see every time they log in to check their balances.

Ultimately, anytime the economy feels unstable due to economic unrest, consumers can feel its effects.

Many people who are near retirement or are in retirement are especially worried when they notice that their 401(k) retirement plan balances are lower than expected. So, here is more information about the Iran War's impact on the market and some steps investors can take right now if they're concerned about their retirement funds.

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Why the Iran War impacts market performance

The Iran War creates investor uncertainty because it's a global conflict that is affecting energy prices. Oil prices are higher because many worry about disruptions to supply chains. That puts pressure on businesses because operating expenses increase, which can reduce profits.

That, in turn, impacts consumers, who have already weathered significant economic uncertainty with tariffs and inflation. This leads many investors to sell their assets, causing the market to decline.

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Investor behavior is one of the biggest risks during market uncertainty

In general, whenever there is global conflict, news headlines create worry and stress. It's important for investors not to let sensational news stories sway them into making serious decisions about their retirement accounts. Attempting to time the market or sell during a downturn can have a negative impact on long-term growth.

Vanguard encourages investors to stay invested even during volatile periods, as leaving the market too soon can reduce long-term returns. Discipline and consistency, more than anything, help investors reach their long-term retirement goals.

Building a cash reserve can insulate investors against volatility

Investors, especially those nearing retirement, may feel more comfortable if they have a large cash reserve.

How large a cash reserve should be to feel comfortable is up to the individual. Some people feel comfortable with a three-month cash reserve, while others prefer having a three-year cash reserve.

Ultimately, knowing you have cash to cover living expenses provides peace of mind, knowing you can live on it without having to withdraw from your retirement accounts during challenging times.

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Historically, markets recover from dips within six to 12 months

The Iran War is not the first time that the stock market has reacted poorly to conflict. Looking back at many events, including major upheavals like the pandemic, the stock market eventually recovers. While every economic upheaval is different, looking at historical statistics can help investors to see trends that point to eventual recovery.

Plus, leading brokerage firms like Vanguard explain that over the past few decades, the stock market has recovered within six to 12 months of several major geopolitical events. Vanguard encourages investors to maintain consistency and to be disciplined investors even during volatility.

What experts recommend for investors during the Iran War

Most financial experts recommend that investors avoid making quick judgments in the middle of a conflict. Having the discipline to hold investments long-term and not to panic-sell is important. Additionally, having the discipline to continue investing and adding to your 401(k) could be beneficial if investors purchase assets at lower prices.

Ultimately, maintaining classic investing principles, such as staying diversified and not selling at the bottom, can help investors stay on track with their long-term retirement goals, even if their account values drop temporarily.

Other ways to minimize financial stress during a global crisis

For those who are worried about their finances or retirement accounts at this time, there are a few other ways to manage financial stress.

In addition to creating an emergency fund, as mentioned previously, monitoring spending and limiting lifestyle inflation can help contribute to healthier finances overall. Holding off on major purchases and big decisions until the market recovers can also reduce financial stress.

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How to get help with retirement planning

If you're not sure whether you're on track for retirement or wondering whether you need to change your retirement withdrawal strategy, consult a licensed financial planner.

A financial planner can help reassure you during stressful market conditions and help you adjust your plan accordingly. Many can also offer advice on tax strategies, especially with respect to managing retirement income.

Bottom line

Although the Iran War is negatively impacting the market and adding stress to many people nearing retirement, it's important to remember that investing is a long-term plan. Historical data shows that the market typically recovers from economic instability over time, which can reassure investors who may be uncomfortable with the current market volatility.

Ultimately, avoiding emotional decision-making and staying disciplined can help people achieve a stress-free retirement. Those who need help and support with their retirement accounts can seek the advice of a financial planner.

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