A rematch between President Joe Biden and President Donald Trump is virtually inevitable as both candidates are poised to accept their party’s nomination this summer.
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While their names are familiar, consumers, entrepreneurs and investors are still determining how their policies will affect the economy and capital markets, according to a study by US Bank Wealth Management.
GOBanking Rates spoke with retirement planners and other financial experts about four smart money moves you should make if you think Trump will win the 2024 election.
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Save during your working years
Many Americans spend more than they earn.
The national average savings rate is 3.6%, and by age 55, the average amount saved is about $77,000, 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 those numbers are even close to achieving a middle-class retirement,” Orestis said. “By age 55, a person must have at least $500,000 growing in tax-advantaged retirement vehicles, and they must add to it each month to the maximum allowable levels.”
If saving $500,000 sounds daunting, 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’d have to give up about 20% of your income to get to that point in your sixties or seventies,” Orestis said. “If you wait until your thirties, you’ll have to double your savings rate to get there.”
Practice smart money management
Being smart about budgeting expenses, managing cash flow and reducing debt is essential to managing what you have wisely, no matter who wins in November.
Using the money you save to “maximize every opportunity with tax-advantaged retirement vehicles like 401(k)s, IRAs and HSAs.
“Look at creating passive income opportunities by investing in real estate, businesses or dividend-paying stocks,” Orestis said. “Owning 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 Bank of America Wealth Management, the policy differences between Trump and Biden are not as significant as people think from an investor perspective and do not always translate into investment results.
Overall, Orestis recommended maximizing every opportunity with tax-advantaged investment retirement vehicles like 401(k)s, IRAs and HSAs.
In addition, clients should work with a credentialed financial advisor to create a comprehensive long-term financial plan, said Robert R. Johnson, Ph.D, CFA, CAIA and a professor of finance at Creighton University’s Heider College of Business.
“Investing without a plan is like driving without a road map or GPS,” Johnson said. “Investors don’t have to worry about broad market moves or daily crunch.”
Instead, Johnson recommends clients create an 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
An election result shouldn’t affect your retirement portfolio if you stay the course, because markets don’t like uncertainty, said Paul Tyler, Director of Marketing at Nassau Financial.
“It’s hard to imagine any election outcome that will fundamentally change the rules for building and successfully using a retirement nest egg,” Tyler said. “During your working years, spend less than you earn and invest the rest. As you near retirement, start taking some market risk off the table by shifting some investments into bonds and seriously thinking about buying annuities.
After the ballots are counted, keep saving, manage your money wisely, and invest with purpose.
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This article originally appeared on GOBankingRates.com: I’m a Retirement Planner: The 4 Moves You Should Make If You Think Trump Will Win the 2024 Election
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