3 Changes Boomers Should Make to Their Savings Accounts Now That Trump Will Be President
Written by
Heather Altamirano
Edited by
Amber Barkley
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President-elect Donald Trump will take office for his second term in just a few weeks, and people are expecting big changes for baby boomers. While Trump’s win illustrates the frustration of millions of Americans fed up with the economy and the rising prices of everything from groceries to houses, his proposed policies could cost people even more.
According to finance experts, here’s the impact Trump could have on boomers and what changes should be made to their savings accounts now that he’s soon to be back in the White House.
Financial Impact
Economic shifts could happen during the Trump administration, and some experts predict boomers could be greatly impacted.
“Under the new presidency of Donald Trump, tax cuts and deregulation are likely to be brought along, as well as changes to the interest rates,” said Adam Garcia, a certified financial planner and founder of Stock Dork. “Although these tax reforms can benefit the wealthy, they might pose a threat to older Americans as the returns on fixed-income assets can plummet alongside inflation.”
According to Gabe Krajicek, CEO of Kasasa, retirement plans and healthcare could also be affected.
“Tax reforms may impact retirement accounts like IRAs or 401(k) [plans], potentially altering how much these older consumers can save or withdraw efficiently,” he explained. “Changes to Medicare or other healthcare policies could also shift out-of-pocket expenses, a critical concern for retirees managing fixed incomes.”
Diversify Retirement Funds and Prioritize Liquidity
To help shield money during uncertain times, boomers should diversify retirement accounts, savings and investments, and “ensure steady, reliable income streams,” Krajicek said. “Having a mix of conservative investments — like CDs, money market accounts and low-risk mutual funds — can reduce exposure to risk while still allowing for growth.”
It’s also important to have some liquidity, he said. “Access to cash for unexpected expenses will be critical, especially as healthcare costs might rise.”
Garcia agreed that diversifying savings accounts can help finances withstand uncertainty. “Allocating to CDs will have a fixed return, which is secure. Locking in rates now can provide stability in a potentially volatile financial climate.”
Move to High-Yield Savings Accounts
An online high-yield savings account can help you grow your money faster than traditional options, because you earn compound interest. Anything around a 4% APY is typically a great return, and stashing money away in a high-yield savings account is something Garcia recommended.
“Trump’s policies are likely to encourage economic growth, resulting in a rise in interest rates,” he said. “Under this, boomers should transition to utilizing higher-yield savings accounts to not only earn better returns on investments but also avoid inflation.”
Even if interest rates don’t rise — or fall, as the Fed may lower the federal funds rate — high-yield savings accounts will offer better interest rates than traditional savings accounts.
Reassess Emergency Funds for Inflation
Economists are sending off warning signals that Trump will actually drive up the cost of prices due to his proposed policies, such as tariffs and mass deportation of people living in the U.S. without legal status, Time reported.
If Trump makes good on his campaign promises, Americans should reassess their emergency savings account to prepare for continued high prices, Garcia said. “Boomers should ensure their emergency savings keep pace with rising living costs, adjusting balances to account for potential inflation under Trump’s administration.”
Nobody knows for certain what proposed policies Trump will enact once he’s back in the Oval Office, but taking steps to protect your nest egg for retirement while maintaining financial comfort is never a bad idea.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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