Could Trump’s inauguration impact your finances? Let’s find out!
Donald Trump will become the 47th president of the United States on 20th January 2025. As the politician gears up for taking the Oval Office, many retirees are wondering how the changing political and economic landscape could impact their financial future. Whether we’ll experience healthcare changes, shifts in tax policies, or Social Security reforms, one thing is certain: we need to be prepared.
Every political actor has different values and opinions regarding what’s best for the country, so with a new administration comes the possibility of major changes. This political change is a chance for all of us to assess our financial stages and make smart money moves that align with all the challenges and opportunities of a new presidency.
So, is your money ready for Trump’s inauguration? From leveraging your potential tax breaks to adjusting your withdrawal tactics, all these decisions, regardless of how small they seem, could have a significant impact on your financial stability in the next years.
Financial advisers tell their clients to take control of their retirement plans ASAP, and we’re here to provide you with all the expert-approved tips you need. So, without further ado, here are the 6 money moves retirees should make before Trump’s inauguration:
1. Monthly budget changes
If you followed Donald Trump’s presidential campaign, you likely heard him propose a 10% universal baseline tariff on imports. According to financial experts, a change like this would increase taxes on American households by an average of $1,253.
Moreover, tariffs usually drive up the costs of services and goods, experts add. If you’re a retiree living on a fixed income, this could have a significant impact on your daily finances.
You can prepare for this modification by taking some time to analyze your monthly expenditures and saying goodbye to some unnecessary things. It’s not a pleasant measure, we know, but it’s important for conserving those precious savings.
2. Tax burden management
In 2017, President-elect Trump signed the Tax Cuts and Jobs Act, which was scheduled to expire in 2026. But during the 2024 presidential campaign, the politician promised to prolong the law, which would cut tax rates.
This means that the tax-deferred income seniors receive at the moment will last them longer than if the government taxed it at higher levels. Moreover, less of our income is taxable under the law now that the standard deduction has doubled from what it was in 2017.
So, if you want to get your finances ready before Trump’s inauguration, experts advise their clients to make contributions to a Roth IRA (if they still have some income, either from a side gig or part-time job). For those age 50 and older, the contribution cap is $8,000 per year.
Moreover, financial advisors believe this change is an opportunity to make the most of tax-free growth opportunities, which will ease your tax burden in return. It’s always better to ask an expert for advice, especially if you need help on specific financial issues.
For example, if you have tax-deferred retirement accounts, an advisor will probably suggest you do some Roth conversions to pay taxes now and make the most of this tax-free growth from that point forward.
It’s also important to find ways to protect your savings, especially before Trump’s inauguration, as we await clearer insights into potential changes in American finance.
With inflation still running high, it’s no secret that the dollar doesn’t stretch as far as it did just a few years ago. Whether it’s renewing your insurance policies, cooking more at home, canceling unnecessary subscriptions, shopping smarter for prescriptions, or refinancing or paying off debt, it’s important to stretch your money for as long as possible so you can enjoy your golden years worry-free.
3. Think of your Social Security benefits
One of the most controversial things during the presidential campaign in 2024 was Social Security. Trump said that he doesn’t plan on making any changes, and while some people were happy to hear this, others heavily criticized him for it.
Speaking of that, maximizing your Social Security benefits is important for every retiree, especially before Trump’s inauguration, as potential future changes could impact your payouts. Experts usually recommend people delay claiming their benefits for as long as possible.
For example, if you wait until the age of 70, you can increase your monthly benefits by up to 8% per year. You can also coordinate your Social Security claims with your spouse to maximize household benefits, if you haven’t already, of course. This can involve tactics like filing for your partner’s benefits while delaying your own to build up a larger payout later.
Take your time and analyze each situation, so your finances are ready for Trump’s inauguration!
4. Protect your savings from inflation
Inflation is a strong concern for everyone, especially for retirees. It’s important to adopt different strategies to protect your savings against inflation. If you’re into investing, you can make your money work for you by investing it in stocks, real estate, or Treasury Inflation-Protected Securities (TIPS).
But if it’s not your cup of tea, you can adjust your retirement withdrawals and ensure that you don’t take out more than necessary during periods of rising prices. Moreover, you can also focus on a sustainable spending plan to help you adapt to rising costs without poking a hole in your budget.
5. What about healthcare?
There may or may not be healthcare changes after Trump’s inauguration, but preparation is key. The first thing to do so you save yourself from financial strain in the future is to review your current health insurance plan.
If you’re on Medicare, for instance, you can check if there are any changes expected or look for different plans that offer better coverage. Moreover, experts recommend looking into Health Savings Accounts (HSAs) if you’re eligible, because they’re tax-advantaged accounts that allow you to save money for your potential future medical expenses.
Don’t forget to also shop around for prescription drug plans because prices can vary greatly. The earlier you plan for your future, the easier it will be to navigate any political changes that could impact your daily life.
6. Create an emergency fund
If you don’t already have an emergency fund, you must create one, especially before Trump’s inauguration, when you don’t know how your finances will be affected. Given the potential for political unpredictability, economic volatility, and possible changes in governmental policies, it’s crucial to have a financial cushion for unforeseen expenses.
You can use an emergency fund to pay for unexpected expenses like house repairs or medical bills without eating away at your retirement funds. Financial experts usually suggest having a minimum of three to six months’ worth of living expenditures.
Keep this money in a money market fund or high-yield savings account that’s always available. This fund may not be necessary but it will help you feel at ease and more secure during your golden years.
If you want to save some cash but don’t know where to start, here’s a piggy bank that will help you kickstart your saving journey. What do you think about all these money moves retirees must make before Trump’s inauguration? Do you agree with any of these? Do you know any other things that will help you reach your money goals? Leave a comment below and join the conversation!
In case you want to check out something else from Easy Seniors Club, here’s a good post for you: Social Security in 2025: 6 Major Shifts That Could Affect Your Benefits
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