3 Things a Biden Win in 2024 Means for Your Retirement Savings
Depending on which side of the political fence you stand on, President Joe Biden is either a savior or slayer of retirement savings. Those who support Biden cite his proposals to protect Social Security benefits. But critics say the president has harmed private retirement savings plans through bad economic policy and excessive regulation.
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As with most things having to do with politics, the truth likely lands somewhere in between. Few of Biden’s decisions as president have had a direct impact on retirement savings. One exception came in March 2023, when Biden vetoed an attempted repeal of a federal rule that lets managers of retirement funds consider the impact of climate change and other environmental, social and governance (ESG) factors when choosing investments.
Indirectly, high inflation during Biden’s term has hurt retirement plans heavily invested in bonds because of interest-rate hikes designed to ease inflation. At the same time, the stock markets have touched all-time highs in 2024, which boosts 401(k)s and other retirement savings plans heavily tied to stocks.
Should Biden win re-election this year, here are three ways he could impact your retirement savings.
Bolstering Social Security
In a March 11 press release, the White House referred to Social Security as “the bedrock of financial security” for American seniors. Biden has promised to oppose any attempts to cut benefits. He has also proposed making wealthy Americans pay Social Security taxes on more of their income.
In addition, the president wants to provide more funding for the Social Security Administration to expand staff, improve information technology and lead to better service.
Fiscal/Inflation Policies
Although inflation has fallen to around 3.2% from a high of 9.1% in 2022, it still remains above the Federal Reserve’s target rate. Biden critics say his policies helped cause high inflation and also blame him for continued high prices on certain consumer items.
One of those critics is E.J. Antoni, a research fellow in The Heritage Foundation’s Grover M. Hermann Center for the Federal Budget
“The Biden administration and their big-spender allies in Congress ran up multitrillion-dollar tabs with no way to pay, so the Federal Reserve just created the money to finance it all,” Antoni wrote in a December 2023 column. “That sparked 40-year-high inflation, which was followed by the fastest interest rate hikes in just as long. This severely hampered equities but completely devastated bond markets, delivering a one-two punch to people’s retirement accounts.”
Retirement Security Rule
Last fall, the U.S. Department of Labor announced plans to close loopholes in current law that let financial advisors recommend investments that pay higher commissions but aren’t necessarily best for clients. The so-called Retirement Security Rule aims to get rid of these junk fees and boost retirement savings.
The Office of Management and Budget received the rule from the Labor Department on March 8, according to the American Society of Pension Professionals & Actuaries. The OMB will review its costs and benefits within 90 days of that date.
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This article originally appeared on GOBankingRates.com: 3 Things a Biden Win in 2024 Means for Your Retirement Savings
