A rematch between President Joe Biden and President Donald Trump is practically inevitable, as both candidates are poised to accept their party’s nomination this summer.
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Although their names are well known, consumers, businesspeople and investors are still determining how their policies will affect the economy and capital markets, according to a Study on US bank wealth management.
GOBanking rates discussed with retirement planners and other financial experts on four smart money moves you should make if you think Trump will win the 2024 elections.
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Save during your working years
Many Americans spend more than they earn.
The National average savings the rate is 3.6%, and at age 55, the average amount saved is about $77,000, he said Chris Orestis, president of Retirement Genius. The company is a “one-stop resource” that helps seniors make the most of their golden years.
“None of these numbers are even close to reaching a middle class retirement,” said Orestis. “By age 55, a person must have at least $500,000 growing in tax-advantaged retirement vehicles, and must increase this each month by maximum allowable levels.”
If saving $500,000 seems intimidating, think about how much you would need to replace your income if you stopped working. For example, do you have enough to replace 70% of your income in retirement?
“If you started saving in your twenties, you would need to set aside about 20% of your income to reach that mark in your sixties or seventies,” Orestis said. “If you waited until your thirty years you would need to double your savings rate to get there.”
Practice smart money management
Be smart about budgeting expenses, managing cash flow, and reducing debt is essential to managing what you have wisely, no matter who wins in November.
Use the money you save to “maximize every opportunity with tax-advantaged investments retirement vehicles such as 401(k)s, IRAs and HSAs.
“Try to create passive income opportunities investing in real estate, businesses or stocks that pay dividends,” Orestis said. “Having life insurance and annuities and being prepared for long-term care costs are important ways to protect your financial security and that of your loved ones.”
Invest with a plan
According to a study by US Bank Wealth Management, political differences between Trump and Biden are not as significant as people think from an investor’s perspective and do not always translate into investment results.
Overall, Orestis recommended maximizing all opportunities with tax-advantaged investment retirement vehicles such as 401(k)s, IRAs and HSAs.
Additionally, clients should work with an accredited financial advisor to create a comprehensive long-term financial plan, he said. Robert R. JohnsonPh.D, CFA, CAIA and professor of finance at Creighton University’s Heider College of Business.
“Investing without a plan is like driving without a roadmap or GPS,” Johnson said. “Investors should not worry about broad market movements or the crisis of the day.”
Instead, Johnson recommends that clients create a Investment Policy Statement (IPS) to guide them through changing market conditions. The plan should only be revised when individual circumstances change, such as death or divorce.
Stay the course
The outcome of an election shouldn’t impact your retirement portfolio if you stay the course, because markets don’t like uncertainty, he said. Paul TylerMarketing Director at Nassau Financial.
“It’s hard to imagine any election outcome that would radically change the rules for successfully building and using a retirement nest egg,” Tyler said. “During your working years, spend less than you earn and invest the rest. As you approach retirement, start eliminating some of the market risk by shifting some investments into bonds and thinking seriously about purchase of annuities.”
After the ballots are counted, continue to save, manage your money wisely, and invest with intention.
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This article originally appeared on GOBankingRates. with: I’m a Retirement Planner: Four Moves You Should Make If You Think Trump Will Win the 2024 Election
