I’m a Retirement Planner: 3 Ways To Protect Your Retirement If Trump Wins
Written by
Jennifer Taylor
Edited by
Justice Petersen
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
After four years away, Donald Trump may return to the White House next year. Among other things, this could bring major changes to the economy that impact your retirement.
When a new president takes office — or in this case, a comeback of a former president — it can disrupt the stock market. Additionally, new policies put in place or the removal of existing ones can have a domino effect that eventually touches your retirement funds.
Whether you’re early in your career or preparing to retire, safeguarding your assets can’t be emphasized enough. If Trump wins the presidency, you may need to refine your investment strategy.
It’s always wise to keep a close watch on your retirement funds. This will help ensure your savings are on track and the approach you’re using still serves you. Of course, there’s such a thing as watching your retirement too closely. According to Spencer T. Hakimian, founder of Tolou Capital Management, market fluctuations are normal, so you don’t want to make sudden moves without consulting a financial professional.
It’s never too early to start thinking about how you’ll protect your retirement funds if Trump returns to office.
Monitor and Adjust for Market Volatility
Don’t expect the stock market to stay quiet if Trump is voted back into office.
“A Trump re-election could lead to significant market volatility, given potential policy changes and geopolitical tensions,” he said. “To protect your retirement accounts, regularly monitor your portfolio and be prepared to make adjustments in response to market conditions.”
This might mean being more cautious with your portfolio than you typically would otherwise.
“Consider increasing allocations to more stable and conservative investments, such as blue chip stocks, bonds and fixed-income securities, to reduce exposure to high-risk assets,” he said. “Diversification remains key, as spreading investments across various asset classes can help mitigate the impact of market fluctuations.”
Capitalize On Potential Tax Cuts
“Trump’s presidency may bring tax policy changes, including potential tax cuts for individuals and businesses,” he said. “Take advantage of these potential changes by reviewing your tax strategy and retirement accounts.”
Depending on the types of retirement accounts you currently have, this might involve opening new accounts or readjusting your savings strategy.
“Contribute to tax-advantaged accounts such as Roth IRAs, traditional IRAs and 401(k)s to maximize tax benefits,” Hakimian said. “If tax cuts are implemented, consider Roth conversions to pay taxes at a potentially lower rate now, allowing your investments to grow tax-free.”
Additionally, if you sell a capital asset for profit, he said the taxes you’ll pay could change.
Currently, short-term capital gains taxes are levied at 10%-37% of the profits on assets you’ve had for one year or less. Long-term capital gains taxes apply to assets you’ve held for longer than a year and are taxed at 0%, 15% or 20%, depending on your taxable income.
“Stay informed about changes in capital gains taxes and adjust your investment strategy to optimize after-tax returns,” he said.
Stay Informed on Regulatory Changes
Returning to a Trump presidency could cause regulatory changes to trickle down to your retirement fund.
“A Trump administration might pursue deregulation in certain industries, which can affect market sectors differently,” he said. “Stay informed about potential regulatory changes that could impact your investments, particularly in sectors like energy, healthcare and finance.”
This might mean you’ll need to adjust your portfolio as needed.
“Align your investment strategy to benefit from deregulation trends while remaining cautious about sectors that may face increased risks,” Hakimian said. “Regularly review your portfolio with a financial advisor to ensure it reflects current regulatory environments and market conditions.”
Even if you think a regulatory change won’t impact your portfolio, meet with a financial advisor to ensure you’re still on the right track. After all, your retirement fund isn’t something you can afford to gamble on.
If you’re like most people, you’re relying on investment gains to grow your retirement fund exponentially. Unfortunately, this can also go the other way, if you’re not proactive with your investment strategy. Therefore, you always need to keep a close watch on your assets.
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
