In the American political arena, retirement may be one of the last great unifiers. Presidents, senators and representatives from both parties know the issue is of paramount concern to many of their constituents.
But just because everyone in Washington agrees on the importance of something, that doesn’t mean they 100% agree on the best way to implement it. Election Day may influence both how people save for retirement, and how and when they withdraw those savings later on. Given these uncertainties, investors may want to double-check that their current financial plan is both long-term and flexible in nature, say retirement experts at TIAA.
Daniel Keady, TIAA’s Chief Financial Planning Strategist, observes that policies can gyrate unpredictably, as politicians focus on short-term considerations and midterm elections. In terms of saving for retirement, however, it’s important for investors to look past the politics and “think long-term, because that’s really what retirement savings is all about,” he says.
With the long-term always in mind, a strong financial plan will allow for the periodic adaptation that’s sometimes necessary after a major election, adds Jim Daniello, a Wealth Management Director at TIAA Individual Advisory Services. “Administrations change, taxes change, tax policy changes. Your financial plan—the location of your assets in regard to taxes—should be flexible,” he says. Talking to your advisor and reviewing an asset location worksheet can help you understand how potential tax increases could affect you.
Once the dust clears from the 2020 election, here are a few possible changes investors could see down the road.
