Headlines about inflation, interest rates, and jobs are already noisy enough. Now, with Congress just days away from a funding deadline, many people are asking: what happens to Social Security, Medicare, and retirement accounts if there’s a government shutdown?

Whether you’re already retired or planning to retire in the next few years, it’s worth knowing what history tells us — and what it could mean for your long-term strategy.

The short answer: shutdowns aren’t new, and while they can cause short-term uncertainty, history shows the long-term impact on retirement planning is usually limited. Let’s break it down.

A Quick History of Government Shutdowns

• They’ve happened before. More than 20 shutdowns have occurred since 1976. The longest lasted 35 days starting in December 2018.
• Markets don’t always move the same way. In shutdowns lasting 10 days or more, the S&P 500 fell four times and rose three times.
• Social Security and Medicare keep going. Even during extended shutdowns, core programs have continued.

How a Government Shutdown Could Affect Retirement Planning

1. Social Security and Medicare

The good news: Social Security and Medicare benefits have historically continued during government shutdowns. That means your checks and healthcare coverage shouldn’t be disrupted.

2. Stock Market Volatility

Markets often wobble around shutdown deadlines. In the last seven shutdowns of 10+ days, the S&P 500 declined by a median of 10.2% in the lead-up. That doesn’t mean history will repeat itself, but it does show how uncertainty can impact investor confidence.

3. Broader Economic Impacts

Longer shutdowns can temporarily slow economic growth. For example, the 2018–2019 shutdown shaved fractions off U.S. GDP in two consecutive quarters. Still, those effects tended to fade once the government reopened.

4. Market Recovery After Shutdowns

History also shows recovery. In the 12 months following shutdowns of 10+ days, the S&P 500 gained a median of 18.9%.

What This Means for You

Whether you’re already retired or planning to retire in the next few years, a government shutdown can sound unsettling. The truth is, the impact looks different depending on where you are in your journey.

• If you’re retired: Social Security and Medicare benefits have historically continued through past shutdowns. That means your monthly income and healthcare coverage are expected to keep going, even if the government temporarily closes some doors. Still, headlines and short-term market swings can create worry — and that’s where your plan helps provide perspective.
• If you’re preparing for retirement: A shutdown may raise questions about the markets or taxes, but history shows these effects have been temporary. The bigger picture is making sure your retirement strategy is flexible enough to handle short-term uncertainty while keeping your long-term goals on track.

At Richmond Brothers, our mission is to help families live fearlessly into and beyond retirement. That means we build strategies designed to help you focus less on Washington politics — and more on the life you want to live.

👉 Would it make sense to take 20 minutes and see how a government shutdown could (or couldn’t) affect your unique plan? Many families find that conversation gives them confidence and clarity in times like these.

Bottom Line

Shutdowns grab headlines, but they don’t have to derail your retirement strategy. With a long-term plan in place, you can stay focused on your goals and spend less time worrying about the daily news cycle.

And if you’d like a second opinion on your retirement plan — or just want to talk it through — we’re here for that conversation. Simply email us at questions@richmondbrothers.com.

Sources

Source

Committee for a Responsible Federal Budget. Sept. 16, 2025. “Government Shutdowns Q&A: Everything You Should Know.” https://www.crfb.org/papers/government-shutdowns-qa-everything-you-should-know#:~:text=Fiscal%20Year%20(FY)%202025%20will,a%20government%20shutdown%20will%20occur. Accessed Sept. 22, 2025.

Vanguard. Dec. 20, 2024. “Staying the course during a government shutdown.” https://corporate.vanguard.com/content/corporatesite/us/en/corp/articles/staying-the-course-during-a-government-shutdown.html. Accessed Sept. 22, 2025.

Brian Sozzi. Yahoo! Finance. Sept. 25, 2023. “The worst government shutdowns and the stock market: What history shows usually happens.” https://finance.yahoo.com/news/the-worst-government-shutdowns-and-the-stock-market-what-history-shows-usually-happens-142728907.html. Accessed Sept. 22, 2025.