senior businesswoman

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While some people have been startled that President Donald Trump has pursued the tariffs he campaigned on, one soon-to-be retiree, Lucinda M., a 70-year-old architect based in California, said she saw it, and other financial moves of his, coming.

Lucinda has been thinking about her retirement funds well ahead of the 2024 presidential election. In fact, back in 2020, when Trump signed the CARES Act into law in his first term, which provided pandemic stimulus checks, loans and approved higher-than-usual unemployment benefits, Lucinda had an inkling that this could have unintended consequences.

“As we went back into regular work and school I remember thinking, ‘people are not going to realize that on some level that they have been subsidized heavily and that this is just a fantasy.”

She did not believe that Trump would subsidize Americans in the same way again in his second term, because she feels his manner of governance is “transactional” and that he mostly cares about “money and power, not the little guy.” 

She fears Trump’s tariffs will not be enough to incentivize a revolution in U.S. manufacturing or boost the economy.

Shifting From Stocks to CDS

Within weeks of Trump’s election, in December 2024, Lucinda and her husband made the call to pull all of their retirement funds — typically invested in stocks and bonds via their Charles Schwab 401(k) — and put them into CDs, instead. “CDs seemed like the safest option,” she said.

What not many people know is that some 401(k) plans allow investors to move their funds from stocks and bonds into CDs without paying capital gains taxes, which she was able to do. At the time, CD interest rates were also on the higher side, between 4% and 5%.

Thus, while others have seen significant portfolio losses as a result of the market drop that followed Trump’s tariff announcements, Lucinda said she lost about $500 total.

She acknowledged that people with direct investments in the stock market may not have the ease to do this, as they would have to pay capital gains taxes.

Safety Over Greed

Others have suggested to Lucinda that she take advantage of the recent market dip and “buy low” but that is not her style. “It’s hard if you’re in the market not to be greedy and excited when you see things go really up and you think, ‘look how much money I made.’ And then two days later it’s worse.”

She’s happy to keep her money where it’s safest until it’s time to begin withdrawing it next year.

A Business Winding Down

Lucinda is in the process of winding down her architecture business, which still currently pays her and her husband a paycheck. By next year, they will no longer receive paychecks and will rely on distributions from their 401(k) and Social Security.

While they could potentially “unretire” if necessary and pick work back up via their business, that is a challenge she hopes not to face, and hopes that Social Security holds steady.

A Ponzi Scheme 

Lucinda worries about the future of Social Security with all the staffing cuts at Social Security offices via the Elon Musk-led Department of Government Efficiency (DOGE) and its potential insolvency if there are no policy actions that change what is now, she said, essentially akin to a Ponzi scheme.

“The new money that comes in is paying out the old, that’s how a Ponzi scheme works.”

She is concerned about the Trump administration’s efforts to remove those who pay into Social Security including those here on work visas, some whose immigration status may still be in flux or temporary, and other reasons.

“This whole fantasy of getting rid of all these people that are paying into Social Security is really going to be a problem because it will ultimately cause the Ponzi scheme to collapse.”

She fears that the sheer speed of DOGE cuts are not leaving room for pause to consider how they will affect Social Security, calling it an “unsafe way of operating.”

Planning Versus Reacting

As a business owner for decades and someone who has been carefully planning for her retirement, she said that the current administration’s economic moves make it very hard to plan versus react.

“It’s time for the country and everybody to take a collective breath and figure out what’s going on,” she said.

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