Today’s economic conditions are…unique, to say the least. Although unemployment is low, inflation remains stubbornly high. And recent tariff announcements have many Americans worried about a recession.

One major concern in the context of recessions is an uptick in unemployment. If you’re retired already, that’s not something to worry about.

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But that doesn’t mean a recession won’t impact you. Sometimes, recessions and stock market declines go hand in hand. And when you’re at a point in life when you’re living off your 401(k) or IRA, that’s a scary thing.

The good news is that there are steps you can take to gear up for a recession, just in case. Here are a few you may want to focus on.

1. Boost your cash reserves

The value of your 401(k) or IRA could decline during a recession, leaving you in a tough spot. That’s why it’s a good idea to boost your cash savings.

In general, it’s smart for retirees to have enough cash on hand to cover one to two years of expenses. But it’s an especially important thing now.

We’ve already seen the stock market take quite the dive in April in response to tariff policies. And it’s hard to know how bad or prolonged that situation will ultimately be. By boosting your cash reserves, you’ll give yourself the option to leave your portfolio alone as needed to ride out the storm.

2. Review your asset allocation

At a time when the stock market is so volatile, it’s important to limit your risk. This doesn’t mean you should go on a stock-dumping spree. But it’s a good idea to review your portfolio — either alone or with a financial advisor — and make sure your risk profile is appropriate.

Remember, bonds may not provide the same level of growth as stocks in your portfolio, but they can be a stable source of steady income. That’s something you need at a time when you don’t have a paycheck coming your way.

3. See if it pays to tap your home equity

If you’re concerned about a recession and its impact on your portfolio, and you don’t feel you have enough cash reserves to sustain yourself during a prolonged market downturn, you may want to look at tapping your home equity. You can do so by applying for a home equity loan or securing a home equity line of credit (HELOC).

The median home equity level for homeowners ages 65 and older was $250,000 as of 2022, per the Joint Center for Housing Studies of Harvard University. If it’s already a bad time to liquidate some investments to boost your cash savings, your home could be your backup plan. You may, however, want to choose a HELOC over a fixed-rate loan since the terms might be more flexible.

A lot of people are feeling uneasy about the U.S. economy right now. So if you’re nervous about a recession, you’re not alone. But if you make these moves, you can set yourself up to get through one without getting hurt financially.

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