Trump Economy: 6 Ways Financial Deregulation Could Impact Retirees
Written by
Kerra Bolton
Edited by
Amber Barkley
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Retirees must brace for changes that could reshape their savings as financial deregulation looms under President Donald Trump’s second administration. Policies aimed at loosening restrictions on banks, investment firms and retirement accounts could reduce fees while increasing market volatility and risk exposure.
In the Trump economy, here are six ways financial deregulation could impact retirees.
Riskier Investments
Deregulation may expose retirees to higher financial risks, such as fraud, market volatility and predatory lending.
“To protect their finances, retirees should stay informed, diversify their investments, consult trusted financial advisors and ensure they have safeguards, like insurance and emergency funds, in place,” said Christopher Stroup, CEO and founder of Silicon Beach Financial.
In addition, deregulation could shift relative prices, potentially impacting retirees depending on their current asset allocations.
“Being aware of these risks and adjusting their portfolio to accommodate the amount of risk retirees and other investors are willing to bear is essential,” said Wayne Winegarden, an economist at the Pacific Research Institute.
Lower Fees
Easing regulations could encourage more financial entities to enter the market, such as private equity firms expanding into 401(k) portfolios.
“Deregulation can create new investment opportunities that could help retirees,” Winegarden said. “Additionally, deregulation can help banks and other financial institutions earn income through other business lines, enabling them to reduce fees for small account holders.”
However, Stroup cautioned that fewer protections and more complex financial products could also emerge.
“Comparing options and understanding the fine print remains essential for retirees,” Stroup said.
Lower Risk on Interest Income
Financial deregulation, coupled with the Federal Reserve’s 2023 decision to raise interest rates to historic levels to combat inflation, could benefit retirees.
Winegarden explained that these economic policies could allow pensioners to earn a higher, risk-free rate of return on savings and CDs at banks. “Deregulation can help encourage this trend and allow retirees to earn more interest income without taking on higher risks.”
More Health Insurance Options
Neal Shah, who runs two tech companies that assist thousands of older adults with healthcare and long-term care, said financial deregulation could increase the availability of health insurance products.
“In my view, the financial deregulation occurring today offers an exciting set of opportunities for retirees to have much more control over their investments and, as a result, their healthcare costs,” Shah said. “From a healthcare perspective, investment options that may yield higher returns offer a potential way to pay for rising medical costs.”
Easier Access to Credit
During his first term, Trump implemented several deregulatory measures to simplify credit access for businesses and consumers. These policies enabled companies to offer more credit products and streamlined the loan approval process.
“At Counterforce Health, we’ve noticed that when banking regulations are loosened, some retirees have an easier time borrowing money, particularly for health-related reasons,” Shah said. “Another possible payoff is that financial product innovation could provide new tools for managing healthcare costs.”
However, Stroup warned that while changes in banking and lending rules could increase retirees’ access to credit — making refinancing mortgages easier — they also have downsides.
“Relaxed regulations could lead to higher interest rates or less favorable terms,” Stroup said. “This may require retirees to carefully evaluate loan offers and ensure affordability in the long term.”
Fewer Consumer Protections
The Trump administration recently halted operations at the Consumer Financial Protection Bureau, an agency created in 2010 to protect consumers after the 2008 financial crisis.
According to Reuters, “The sudden halt of work has a swath of consequences: It leaves much of consumer finance, from mortgage companies to payment apps, unsupervised, and removes a venue where consumers could file complaints about their providers.”
Winegarden urged retirees to fully understand the implications of existing and new credit and refinancing options under the relaxed regulatory environment.
“Never invest in something you don’t understand,” Winegarden said.
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