Turning anxiety into engagement: How advisors can support retirement plan savers during a shutdown

The recent US government shutdown likely triggered immediate ripple effects across the workplace and has implications for retirement savers. For advisors supporting employer-sponsored retirement plans, this moment demands not only reassurance but strategic foresight. Participants are watching their financial futures with heightened concern, and many are looking to their advisors for clarity and leadership.

This outlook offers a strategic lens on how shutdowns may affect retirement portfolios and participant sentiment, and how advisors may proactively guide clients through the noise.

Market volatility: Navigating the immediate disruption

A shutdown can trigger short-term market volatility, especially when key economic data releases are delayed. The absence of reports like the employment report or Consumer Price Index can leave the Federal Reserve “flying blind,” potentially influencing interest-rate decisions.¹ For plan participants, this uncertainty may spark anxiety about portfolio performance.

Advisors can help participants understand that volatility is a natural part of the investment cycle. Historical data shows that markets have typically rebounded post-shutdown. For example, after the 2013 and 2018 shutdowns, the S&P 500 Index recovered within weeks.² Advisors can use these examples to reinforce that staying invested and maintaining a diversified portfolio—even when news alerts are dire—made a difference in outcomes.

Moreover, during periods of heightened uncertainty, investors often shift toward lower-risk assets—a phenomenon known as “flight to safety.” This behavior can stabilize bond markets but may also lead to missed opportunities if equity markets rebound quickly. Advisors should help participants weigh these trade-offs and avoid reactionary decisions that could undermine long-term goals.

Participant sentiment: Turning anxiety into engagement

Shutdowns can raise concerns about income continuity, especially for retirees. While Social Security and Medicare typically remain unaffected, the broader economic narrative can still unsettle participants. According to the 2025 Voice of the American Workplace survey, 54% of workers fear they won’t be able to live the life they want during retirement.³ This concern is compounded by the fact that 89% say access to benefits that evolve with their needs would give them a sense of long-term security.

Advisors can use this moment to engage participants more deeply and could offer plan sponsors educational communications or online resources.

• Clarify secure vs. delayed income sources to reduce confusion and build confidence.
• Promote financial wellness strategies such as emergency savings and diversified income streams.
• Reinforce plan design features like auto-enrollment and default offerings such as target-date funds that help participants stay on track.

This is also a prime opportunity to educate participants about the role of bonds in a balanced portfolio and how short-term volatility does not necessarily signal long-term risk.

Strategic positioning: Advisor actions that matter

Shutdowns offer a window for advisors to demonstrate leadership and deepen client trust. Key actions include providing participants with regular communications or educational materials.

• Portfolio reviews to assess exposure to sectors sensitive to government funding (e.g., defense, health care).
• Establish a consistent communication cadence to provide timely updates and context.
• Use scenario planning tools to model potential outcomes and recovery paths.

The Voice of the American Workplace survey also found that 92% of employers believe protecting employees’ retirement futures is key to building lasting relationships, and 90% view retirement planning as a collaborative effort between employer and employee.³ This alignment presents a powerful opportunity for advisors to position themselves as strategic partners—not just investment managers.

Post-shutdown recovery: Positioning for the rebound

Once funding is restored, markets have often responded positively. Advisors should potentially be ready to address questions and share education about:

• Rebalancing portfolios to align with emerging sector trends and participant risk profiles.
• Reinforcing long-term investment discipline and plan engagement.
• Monitor policy shifts that may follow the shutdown, including fiscal stimulus or regulatory changes.

Recovery phases often present opportunities to revisit asset allocation and ensure portfolios are positioned for optimal gains. Advisors can guide participants through this process, helping them stay focused on long-term outcomes rather than short-term noise.

Final thought: Leadership through uncertainty

Shutdowns test investor confidence—but they also spotlight the value of thoughtful, proactive guidance. Advisors who combine market insight with participant empathy can help clients not only weather the storm but emerge stronger.

This is a moment to lead with clarity, educate with purpose, and position portfolios for resilience.