Experts suggest that people approaching retirement should take these steps to avoid being upended by a recession.

• Experts are divided on whether the U.S. economy will face a recession with the Federal Reserve preparing to lower interest rates.
• Near-retirees and retirees may encounter the greatest financial risks if an economic downturn disrupts their retirement plans.
• To better safeguard your financial plan from the unexpected, experts recommend asking certain questions.

The Federal Reserve is preparing to lower interest rates, and experts are uncertain about the future of the U.S. economy.

Some fear the economy may experience a recession, while others hope the central bank can prevent a downturn with a "soft landing."

The stakes are especially high for those approaching or already in retirement.

The size of their retirement nest egg and planned retirement date could be affected by a recession or sudden market decline.

JPMorgan's former head of retirement solutions, Anne Lester, advised that everyone nearing retirement should consider their "Plan B."

""Building scenarios and asking yourself, 'What would I do?' is a great idea, as it can help you avoid panicking and making unwise decisions," Lester advised."

According to David Blanchett, managing director and head of retirement research at PGIM DC Solutions, research indicates that individuals nearing retirement are more likely to experience panic during a recession.

Blanchett stated that being proactive is particularly beneficial for older Americans who are facing the reality of retirement.

To test your current retirement plan, asking some questions can help.

Is my portfolio allocated where it should be?

A market decline can increase the risk of sequence of returns for retirees and near-retirees, where poor investment returns can shorten the duration of their retirement savings.

If you are near the end of your career or just starting retirement and a recession hits, then you have less time than you'd like for your portfolio to recover, according to Emerson Sprick, associate director of the Bipartisan Policy Center's economic policy program.

A market selloff can occur without triggering a recession, according to Lester. Conversely, a recession can occur without significant stock market declines.

To ensure that your retirement nest egg and the markets are always prepared for unexpected big hits, it is essential to always be ready.

Lester stated that it's uncommon for markets to experience a significant correction, defined as a decline of 10% or more, and continue to decline.

Lester stated that it is highly unlikely that we will experience another 1929-like period with five or seven consecutive years of poor returns.

How can investors prepare for lower interest rates? Why should some investors not max out their 401(k) contributions? What are the answers to data breach questions regarding Social Security numbers?

There are guidelines that suggest how much you should allocate to equities based on your age, such as subtracting your age from 120. For instance, if you are 50 years old, you should have 70% of your portfolio in equities. If you are 70, equities should make up only 50% of your investments.

Blanchett stated that everyone's financial situation and risk tolerance are unique, depending on their asset mix.

Now can be a great time to get ahead of certain risks.

If the portfolio goes down by 10%, move to cash immediately, Blanchett advised.

Government bonds offer the chance to earn returns that were previously unavailable, he pointed out.

Having a cash buffer of two to three years of spending can be a solid approach for retirees and near retirees to avoid selling investments and locking in losses when the market declines, Lester said.

What are my sources of income?

A steady income can help mitigate the effects of market fluctuations on your investment portfolio.

For most retirees, Social Security provides steady monthly checks.

If you claim your retirement benefits at age 62, they will be permanently reduced. However, if you wait until full retirement age, typically between 66 and 67, you will receive 100% of the benefits you've earned. Additionally, if you wait until age 70, you may be eligible for an increase of about 8% per year.

Blanchett stated that now more than ever, it is a remarkable idea to postpone claiming Social Security.

An annuity is an insurance product that offers a monthly income stream in exchange for a lump sum payment made to the insurance company.

According to Lester, who is an education fellow for the Alliance for Lifetime Income, a nonprofit that educates consumers on annuities, higher interest rates lead to better payment streams from annuities.

"Blanchett stated that lower interest rates resulting from likely future rate drops are likely to lead to lower annuity payouts. However, addressing this issue now rather than later will result in more income and a higher return."

Fixed annuities, including multi-year guaranteed annuities, can offer tax-advantaged guaranteed returns for older Americans, according to him.

It is advisable for consumers to research annuities before buying to ensure they align with their financial situation. Seeking advice from a trustworthy licensed financial expert can aid in the decision-making process.