How Biden vs. Trump Policies Could Impact Your Retirement Plan
As we approach the upcoming presidential election, it’s important to consider how the policies of President Joe Biden and former President Donald Trump could impact your retirement plan. While the traditional best practices of retirement planning are crucial, such as starting early and diversifying your portfolio, the political landscape can also play a significant role in shaping your financial future.
Jonathan Feniak, an attorney and founder of Feniak Consulting Group, LLC, highlighted the importance of monitoring policy changes and their potential impact on the market. By staying informed about the candidates’ stances on Social Security and retirement-related policies, savvy investors can make more informed decisions about their investments.
Savings Contributions
Trump’s policies tend to benefit high-income households, while Biden’s policies are more favorable to low- to middle-income earners. Trump has supported maintaining or expanding tax deductions for retirement savings, while Biden has proposed changing the tax benefits of 401(k) plans to a tax credit system. Both candidates have also advocated for increasing the age for required minimum distributions and expanding access to retirement accounts for part-time workers.
Investment Growth
While historical data shows no clear connection between presidential election outcomes and market performance, the candidates’ policies can impact specific sectors and industries. For example, Trump’s focus on deregulation could benefit industries like fossil fuels and financial services, while Biden’s support for renewable energy and technology sectors could lead to growth in those areas.
Social Security
Both candidates have promised not to cut Social Security benefits, but they have different approaches to strengthening the program. Biden has proposed increasing benefits for certain groups and applying payroll taxes to higher incomes, while Trump has not proposed expanding Social Security and has faced criticism for his payroll tax deferral.
Back to the Basics
As we consider the potential impact of the presidential election on retirement planning, it’s important to remember the role of Congress in shaping policy. The outcome of congressional elections could determine whether Biden or Trump’s policies are implemented, so it’s essential to stay informed and be prepared for a range of outcomes.
Ultimately, having a sound retirement plan that takes into account potential policy changes and market fluctuations is key to securing your financial future. By staying informed, diversifying your investments, and adjusting your strategy as needed, you can navigate the ever-changing political landscape and protect your retirement savings.
