How Stable Would Your Retirement Savings Be Under a Second Trump Presidency?
Written by
Laura Beck
Edited by
Gary Dudak
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
If you’re gearing up for retirement — or even if it’s a ways off — you probably keeping an eye on your savings. One question that might be at the top of your mind before the November election is: How safe will that money be if Donald Trump becomes president again?
GOBankingRates spoke with financial experts to figure out the answer. Here’s how stable your retirement savings would be under a second Trump presidency.
Tax Cuts: A Double-Edged Sword
Anthony Saccaro, president at Providence Financial & Insurance Services, provided insight into Trump’s tax policies. “Trump plans to extend the TCJA (Tax Cuts and Jobs Act), maintaining current tax levels for both individuals and corporations,” he said. “Personal taxes would remain stable, with corporate taxes possibly dropping from the current 21% to as low as 15%.”
Lower taxes mean more money in people’s pockets. But there’s a catch. While tax cuts might mean more money for you now, they could lead to problems later. If the government has less money coming in, it might have to borrow more. This could make programs like Social Security and Medicare (which many retired people depend on) less stable in the future.
The Stock Market Roller Coaster
Trump’s policies might help certain parts of the economy. “Trump’s approach to capital gains taxes and stock buybacks is one of stability, with no significant changes proposed … which should keep the markets on a steady footing,” said Saccaro.
However, some experts worry that this stability might not benefit everyone equally. Certain industries, like oil companies and banks, might do well under Trump’s policies. But others, like companies working on clean energy, might struggle.
Immigration and the Labor Market
Trump is known for wanting stricter rules on immigration. While this might sound good to some people, it could actually cause economic problems. Saccaro said, “Trump is likely to pursue a more restrictive policy compared to [his opponent]. This approach could lead to labor shortages, reduced consumer spending, and a softening of the housing market.”
If fewer people are coming to the country to work, we might not have enough workers for all the jobs. This could slow down the economy and affect programs like Social Security, which relies on current workers paying into the system to support retirees.
A Reality Check
Ron Surz, co-host at Baby Boomer Investing Show, offered a sobering perspective that applies no matter who’s in office. “My advice to baby boomers is the same regardless of who wins the election. Protect your savings because you are in the Retirement Risk Zone when Sequence of Return Risk is a serious threat. Losses now could ruin the rest of your life. The election doesn’t change that.”
This underscores the importance of having a solid, diversified retirement strategy, regardless of who’s in the White House.
The IRS Factor
Trump says he wants to take back money that was meant to update the IRS. This might sound good if you don’t like taxes, but it could backfire.
If the IRS can’t collect as much in taxes, the government might have less money overall. This could mean less funding for programs that many retired people rely on, like Social Security or Medicare.
The Final Word
To sum it all up, under a second Trump presidency, retirement savings could potentially benefit from lower taxes in the short term and possible stability or even growth in certain markets. On the other hand, the risks include potential long-term economic instability because of increased national debt, possible reduction to programs retirees count on, and potential market volatility.
As Surz wisely pointed out, your retirement security depends more on your personal financial decisions than on any single political figure or policy. So while it’s important to understand how Trump’s potential policies might affect your retirement savings, it’s even more important to keep an eye on your actual retirement savings and make the moves you feel are best for you.
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.
More From GOBankingRates
