The Trump Economy Begins: 4 Money Moves Millennials Should Make Before Inauguration Day
Written by
Kerra Bolton
Edited by
Amber Barkley
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President-elect Donald Trump will be sworn in for a second term next month, prompting economic changes that could affect everything from taxes to tariffs. For millennials, now is a critical time to prepare, as Trump’s economic proposals could affect their taxes, student loan repayments, purchasing power and jobs.
“Regardless of the changes in the economy and tax policy, it is a good idea for millennials to pay down debt, save for retirement and build an emergency fund,” said Lisa Greene-Lewis, a TurboTax expert.
As the Trump economy begins, here are four money moves millennials should make before Inauguration Day.
Boost Retirement Savings
Greene-Lewis said investing in retirement savings could help millennials lower their taxes while building their nest egg. For example, millennials can contribute up to $23,000 in their 401(k) plans by Dec. 31 to lower their taxable income.
“If your employer matches your contributions, then it’s a win-win,” Greene-Lewis said. “You can also consider contributing to your IRA. For the 2024 tax year, you can contribute up to $7,000, and you may be able to take a deduction for the contribution.”
Greene-Lewis also recommended millennials take advantage of the Retirement Contributions Savers Credit, also known as the “Savers Credit.” It is a special tax break for low- and moderate-income taxpayers who are saving for retirement. The maximum credit amounts are $1,000 for individuals and $2,000 for married households filing jointly.
Review Your Investment Strategy
Justin Peters, host of the personal finance podcast “The Struggle is Real,” said he doesn’t anticipate the incoming Trump administration favoring a particular asset class.
“My personal strategy is to continue to buy and hold low-cost index funds that cover all of the U.S. and international stock market,” Peters said. “These can be easily purchased through online brokerage accounts like Fidelity or Vanguard.”
Peters recommended considering the fund’s expense ratio.
“This is the cost to own that fund,” he explained. “Look for funds that charge less than 0.25%.”
Alex Blackwood, CEO and co-founder of mogul Club, a fractional real estate investing app, said millennials should consider investing in alternative assets with steady returns.
“Looking at the stock market, a number of analysts at Goldman [Sachs] and J.P. Morgan are forecasting sub-par returns for the stock market in the coming years,” Blackwood said. “So, alternative assets might be the safest inflation hedge.”
Blackwood said millennials should consider investing in real estate, because it could offer a steady cash flow with the upside of appreciation.
Start a Side Hustle
Blackwood said millennials shouldn’t gamble their entire livelihood on one job, especially during times of policy changes or market shifts.
“In periods of economic turmoil, jobs can be lost due to external circumstances that you cannot control,” Blackwood said. “By creating multiple income streams, you are not overly reliant on one.”
Several studies found that about half of all millennials have a side hustle. According to statistics compiled by Millennial Money, millennials make an extra $12,689 a year from side hustles.
Prioritize Essential Needs
According to Deloitte’s Global 2024 Gen Z and Millennial Survey, while 40% of millennials said they felt more optimistic about the economy than they did four years ago, about a third (32%) said financial insecurity was a significant concern, and over half reported living paycheck to paycheck.
However, millennials can take practical steps to prepare for potential market shifts and minimize financial insecurity, said Christopher Stroup, founder and president of Silicon Beach Financial.
“Millennials can offset inflation by cutting discretionary expenses, leveraging budgeting tools and prioritizing essential needs,” Stroup said. “Automated savings, such as for retirement or an emergency fund, can help ensure that long-term goals aren’t neglected while managing short-term price increases in housing and groceries.”
In addition, millennials can change their budgeting strategy to reflect their priorities.
“Millennials can offset rising living costs by adopting a zero-based budget, prioritizing essentials and cutting discretionary expenses like subscriptions or dining out,” said personal finance expert Pattie Ehsaei.
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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