I’m a Financial Advisor: 3 Reasons My Retired Clients Are Concerned About a Harris 2024 Win
In only a few months’ time, the next major U.S. election will come to a close and the country will have its next president. Either Donald Trump or Kamala Harris will take office next year, but the race appears close.
Regardless of who gets elected, the country is bound to face some policy changes. These could affect everything from taxes to retirement benefits. For those who’ve already retired or who are about to retire, there’s a lot of speculation about how the presidential election will affect them on an individual level.
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GOBankingRates reached out to financial advisor Christian Strange to find out the top concerns his retired clients have about a Harris win. Here’s what you should consider.
Tax Policy Changes Could Lower Disposable Income
“Many of my retired clients express concerns over a potential Kamala Harris presidency due to tax policy changes,” said Strange, a financial advisor with Strange Insurance Agency. “Higher taxes, especially on investment income and estate taxes, could reduce disposable income and impact estate planning strategies.”
It’s too soon to say exactly how Harris would affect tax policies going forward. However, she has supported using current tax code to address issues on an economical and societal scale.
Harris has proposed several tax-related policies, some of which have come to fruition. Here are just a few examples, as cited by the Tax Policy Center’s staff and researchers:
LIFT Act: While still a senator, Harris proposed the LIFT Act, which would have provided a refundable tax credit to working Americans — $3,000 for unmarried workers, $6,000 for married workers. It would have been available to those earning up to $50,000 (single individuals) or $100,000 (married couples). It didn’t come to fruition, however.
Refundable tax credit: Harris also proposed a refundable tax credit designed to help those who spend at least 30% of their income on rent.
Small business tax credit: Harris also has historically supported small businesses. She proposed the idea of giving a $10,000 tax credit to rural businesses per newly hired full-time staff member. This credit would have capped at $250,000 a year per business location.
Electric vehicle tax credit: Harris also has been a strong proponent of clean energy. An example of this is when she supported the idea of introducing tax credits for EVs and other renewable energy initiatives. Some of this made its way into Biden’s Inflation Reduction Act (IRA).
2017 Tax Cuts and Jobs Act (TCJA): Like many others, Harris voted against this act and has, in fact, discussed the idea of repealing the law altogether. This would let the current tax cuts expire, though anyone making $400,000 or less wouldn’t be impacted by tax hikes.
Capital gains tax: Harris has advocated for taxing capital gains at the same rate as regular income.
Other proposed tax policies: Harris has long advocated supporting low- and moderate-income households via tax policies geared toward reducing the financial burden these individuals face.
So far, Harris hasn’t given a dedicated plan to her proposed tax policies as president of the U.S. Thus, any impact on retirees — and working individuals — remains to be seen.
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Estate Taxes Could Increase
Strange did mention that some of his retired clients are concerned that estate taxes could increase under a Harris presidency.
“Estate taxes are also a concern, as the current exemption of over $11 million per person could be lowered,” he said.
This would subject more estates to the “death tax.”
“For clients with valuable assets, this threatens to reduce what they can pass on to heirs,” Strange said.
When Barack Obama was president, he set an estate tax exemption of $5 million per spouse — an amount that was set to increase each year with inflation. Later, when Donald Trump signed the TCJA into law, it doubled this exemption to $11 million per spouse — or $13.61 million in 2024.
If Harris gets elected and repeals this law, the higher exemption could disappear. That said, this would affect only those with large estates.
Capital Gains Tax Could Increase
Alongside his clients’ concerns of higher estate taxes, Strange said many of them also worry about capital gains tax.
“While campaign promises don’t always come to fruition, increased government spending and social programs often require higher taxes to fund them,” he said. “My clients worry this could reduce retirement account balances and investment income over time through higher capital gains taxes.”
America Has To Wait and See
There’s no way to know the full effects of the presidential election or what Harris might do until after the event. Even if Harris does propose certain tax policy changes, they won’t necessarily affect everyone equally.
Some individuals, especially low- or moderate-income retirees, might not see much of an effect at all. In some cases, the impact of a Harris presidency could even be positive.
As Strange said, “There are certainly potential upsides of a Kamala Harris presidency for retirees, like expansion of social programs.”
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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This article originally appeared on GOBankingRates.com: I’m a Financial Advisor: 3 Reasons My Retired Clients Are Concerned About a Harris 2024 Win
