How this Election Year Could Impact the Economy and Your Retirement
Election years historically bring uncertainty to the stock market, and uncertainty often translates to economic volatility. While the changing of the guard will have an impact on your retirement, changes you make today can determine if it’s positive or negative.
In January, the retirement landscape was impacted by the SECURE Act which changed retirement rules. To understand how this Act could affect your financial future, check out the pros and cons highlighted by Forbes.
On the heels of this event, March brought us the CARES Act which spent $2 trillion on the largest economic stimulus package in history. With another package in the works, our budget deficit and national debt have never been greater and will potentially get bigger.
Mid-year 2020 has now ravaged our unemployment rates and seen business shutdowns across the country. Higher unemployment means less tax money collected from both payroll and sales.
Regardless of who wins the election and the ensuing changes to Congress, government is going to need to decrease the national debt, repay the stimulus, and find more revenue. History tells us repayments typically come from increased taxes. There are steps you can take to prepare yourself financially.
According to Dave Ramsey, election-year strategies should include:
- Invest a percentage of your household income into Roth IRAs and tax-advantaged retirement plans.
- Continue to contribute to your 401(k) and fund a Roth IRA for you and your spouse.
- Keep investments simple. Let us help you choose the best options.
- Select mutual funds with a solid history of growth and stick with them for the long haul.
- Time is the fuel behind compound growth. That’s why it’s so important to start saving for retirement as soon as possible.
Your plan needs to look past the election rhetoric, past the election outcome, and beyond how the stock market reacts to a new president. If you control your plan and how you follow through on it—stay the course—you should come out a winner.
The election is only a few months away, so reviewing your plans now is incredibly important. Call us at (860) 461-1709 and we can help.
Adapted from Dave Ramsey1: https://www.daveramsey.com/blog/how-the-presidential-election-affects-retirement