What will the new administration’s tax and economic policies mean for retirees? 

Changes to tax policy under the Trump administration and the macroeconomic environment could also have implications for retirement planning.   

The current income tax rates under the Tax Cuts and Jobs Act of 2017 expire at the end of 2025. A decision to extend those cuts, deepen them, or allow them to expire (which seems unlikely) would have implications for investors’ decisions about how to use traditional tax-deferred retirement savings accounts versus Roth IRAs, and for Roth conversions. Any changes would also have an impact on taxes paid on drawdowns. 

Certainly, an extension of the TCJA rates would reduce or eliminate any need to speed up moving money out of tax-deferred IRAs. 

Additionally, many economists think that Trump’s proposed tariffs and immigration restrictions will spark a new round of high inflation that could erode retirees’ standard of living.  Without larger than historically provided coat of living adjustments to social security benefits, this could pose a challenge.  It would be prudent to consult with your financial advisor to ensure that your portfolio reflects the appropriate risk and reward strategies moving forward.