I’m a Retirement Planner: What It Means for Your 401(k) If Kamala Harris Wins in November
Written by
G. Brian Davis
Edited by
Daria Uhlig
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Elections always come with uncertainty — and this election year has seen more than its fair share.
While some of that uncertainty feels far removed from Americans’ day-to-day lives, one tangible way that presidential elections affect workers is by their impact on retirement plans.
With that in mind, how might a Harris administration impact your 401(k)?
Manufacturing Boom Could Strengthen Your Portfolio
“It has been a theme of the current administration to bring manufacturing back to America,” noted Sidney Curry, certified financial instructor and president of BCH Holdings.
“Manufacturing jobs have increased significantly over the past four years, with tens of thousands of new jobs and increased wages to show for it. There is no reason to believe that this economic boom of bringing manufacturing back to America will not bode well for retirement portfolios across the country.”
Potentially Strong Returns on Renewable Energy Investments
The Biden-Harris White House has pushed clean energy initiatives. That would likely accelerate under a Harris presidency.
Serial entrepreneur Brenda Christensen noted that U.S. green energy companies stand to perform well under a Harris administration. If so, your 401(k) could benefit from renewable energy-themed mutual funds and exchange-traded funds.
Higher Regulation, Inflation Could Adversely Affect Stock Prices
“A Harris administration would continue to focus on regulation, which will increase expenses for many companies,” said Curry. “That could increase prices for consumers, as companies tend to pass on increased costs by raising prices.
“This could decrease your buying power both now and in retirement, forcing you to spend more money for goods and services such as gas, oil and energy.”
Christensen also foresees higher regulation and inflation, noting that “companies that specialize in compliance and regulatory services might see growth and provide stability to your investment portfolio.”
Rent Caps Could Dampen Real Estate Investments
If real estate investments feature in your retirement portfolio, watch out for more aggressive regulation. In fact, the Biden-Harris Housing Plan proposed nationwide rent stabilization laws targeted at corporate landlords.
“Harris has strongly supported capping rental increases,” Curry said. He believes that if Harris is elected, her housing platform would make up a significant part of her economic agenda.
Higher Higher Taxes Could Offset Gains
The tax proposals from the Biden-Harris White House have centered around raising taxes on corporations and high-income individuals.
On the corporate side, the administration proposed raising the corporate tax rate from 21% to 28%. Investors could feel those higher tax rates — and the resulting reductions in profit — in the stock prices in their 401(k) accounts.
On the individual side, higher income tax could force high earners to reduce their 401(k) contributions, and higher capital gains tax could eat into 401(k) distributions in retirement.
Final Thoughts
No matter who wins the presidency in November, stick with the fundamentals of building your own nest egg.
Increase your savings rate. Contribute to tax-advantaged accounts such as 401(k)s and individual retirement accounts. Invest in a diversified portfolio.
You have far more control over your own investments than you do the president’s policies. Lay the groundwork for a comfortable retirement, regardless of which policies come and go in Washington between now and then.
Editor’s note on election 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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