3 Ways a Trump Second Term Could Affect Retirees’ Finances
The individual who holds the top spot in the White House come Jan. 20, 2025, will have the power to enact financial policies that could affect America’s retired population. While we don’t know who that will be or what that might mean, it’s important for retirees and near-retirees to consider all possibilities.
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Here’s a look at the ways a second term for former President Donald Trump could affect retirees’ finances.
Changes to Taxation
During Trump’s first term, he made significant changes to tax law — and he could do the same again.
“During Trump’s presidency, one key area that impacted retirees was the Tax Cuts and Jobs Act (TCJA),” said David Brillant, tax and trust and estate lawyer at Brillant Law Firm. “The TCJA lowered individual income tax rates, which on one hand, provided some retirees with a lower tax bill on their taxable retirement income. However, for retirees with significant investment income, the changes in tax rates and deductions under the TCJA required a reevaluation of their tax planning strategies to optimize their after-tax income.”
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Changes to Social Security and Medicare
It’s possible that Trump would make changes to government programs that benefit retirees.
“While there were discussions around altering Social Security and Medicare, substantial changes to these programs didn’t materialize during Trump’s term,” Brillant said. “However, any future proposals to change these could significantly affect retirees’ financial health, underscoring the importance of staying informed and prepared to adjust financial and estate planning strategies accordingly.”
How Retirees Can Prepare for a Trump Second Term
Although we don’t know who will win the election, there are steps retirees can take now to be in a good financial position no matter who becomes president next year.
“For retirees, it’s essential to stay informed about policy discussions and consider financial planning strategies that offer flexibility in the face of potential changes,” said Alana Gibson, chief operating officer at DGR Legal. “Diversification of income sources, careful tax planning and staying abreast of policy developments are prudent strategies under any administration.”
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This article originally appeared on GOBankingRates.com: 3 Ways a Trump Second Term Could Affect Retirees’ Finances
