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  • Writer's pictureJohn A. White

How Will Trump vs. Biden Election Outcomes Affect Your Retirement Planning?

Updated: Feb 27

As the dust settles on the campaign trail, your focus might shift from ballot boxes to retirement prospects. The impending 2020 U.S. Presidential Election between Donald Trump and Joe Biden is a pivotal event that could shape the landscape of retirement planning in the future. Critical areas like tax implications, retirement plan access, Social Security benefits, and healthcare costs await the influence of the Oval Office's next occupant. Historically, the stock market tends to display resilience, with stock market performance in election years often remaining robust, regardless of the winning party.

You may wonder what the election outcomes might spell for your fiscal longevity at this political juncture. Whether pledging allegiance to Trump's policies that have left retirement plans mostly untouched or leaning towards Biden's blueprint for an overhauled tax structure and expanded healthcare, knowing the potential impacts on your nest egg is crucial. Diversification and a sustained planning strategy are your steadfast allies amid the electoral ebb and flow. But as the votes tally, let's preview how the financial future could unfold for you under each candidate's administration and what that means for your financial serenity as we delve deeper into retirement planning during this election year.

Impact of a Trump Win on Retirement Planning

Should Donald Trump secure a second term, retirees and those nearing retirement age may see a continuation of policies that, in the past, have leaned towards supporting individual financial growth through tax relief and market-friendly strategies. However, it's essential to delve into the specifics and outline the potential implications of a Trump win for your retirement planning.

First and foremost, Trump's tax strategies introduced post-2016 have generally provided a boon for retirees. Individual income tax rates were lowered, and the standard deduction nearly doubled, offering clear short-term gains for your tax bill. These changes could be extended under a Trump administration, potentially maintaining more money in your pocket during your retirement years. Also, early retirees may find some flexibility due to the elimination of the Obamacare individual mandate penalty.

Trump's administration also delayed the fiduciary rule, a decision that could continue to allow financial institutions to advise on retirement accounts without a mandated focus on clients' best interests.

This underscores the need for due diligence in choosing advisors or investment recommendations for retirement planning. In retirement regulations, the SECURE Act—signed in 2019—bears mention, as it raises the required minimum distribution age to 72 and opens 401(k) plans to long-term, part-time workers. These provisions add another layer of options to your retirement strategy.

Considering the economy, the implications of Trump's fiscal policies are twofold:

  • Corporate Taxes: A proposed further reduction of the corporate tax rate from 21% to 15% could stimulate economic growth, potentially positively affecting your retirement investments. Yet, this stimulation may jar inflation expectations, impacting bond markets and your fixed-income assets.

  • Trade Policies: It's vital to stay apprised of how Trump's trade stance—such as the proposed 10% tariff on all U.S. imports—might influence the stock market. The stock market's volatility, a hallmark of tension in international trade, is directly tied to your investment portfolio's performance. For those invested in ESG (Environmental, Social, and Governance) funds, awareness of Trump's stance on such investments is crucial, as regulations or bans could shift the appeal and performance of these funds. On a broader scale, continuous geopolitical maneuvering by a second-term Trump administration might introduce escalated risks and uncertainties within the markets, potentially affecting both domestic and international investment landscapes. Financial advisors universally stress the importance of maintaining a steady course with investments during an election year. As you observe the stock market in election years, remember that although instability can occur with events like trade wars or changes in fiscal policies, historical trends show that investment returns tend to average out over time, irrespective of the political party in power. Your retirement planning during an election year should pivot on informed, long-term strategies rather than reactionary changes. Familiarizing yourself with the potential impacts outlined here can help shape your approach, ensuring that your retirement planning remains robust and responsive to the shifting political winds.

Impact of a Biden Win on Retirement Planning

As we focus on the potential impacts of a Biden win on your retirement planning during an election year, examining the proposed changes that signal a new direction is imperative. One of President Biden's significant focuses is fortifying retirement plans and addressing the looming Social Security shortfall. If you're pondering how a change in administration could influence your golden years, here's what you might expect:

  • Biden's commitment to bolstering minimum Social Security benefits could raise individual benefits to at least 125% above the poverty level. In real terms, based on the 2020 poverty level of $15,950, that's a minimum floor that could see retirees enjoying a more comfortable standard of living.

  • For couples navigating retirement, the Biden plan proposes a considerable boost—surviving spouses could receive up to 75% of the combined household's original Social Security income. Additionally, individuals who have weathered the retirement journey for over two decades would benefit from a 5% increase in Social Security payments.

  • Acknowledging that these enhancements offer a short-term solution, projected to extend the Social Security Trust Fund's solvency until 2032, is crucial. Considering your long-term investment strategy within the stock market, it's also wise to monitor potential regulatory changes under a Democratic administration, especially those related to investor protections and fiduciary responsibilities. The Democratic platform advocates for financial advisors to prioritize your best interests legally, a move designed to safeguard your retirement assets.

  • Your strategy regarding retirement savings vehicles may pivot under Biden's leadership. Wealthier Americans, for instance, might find Roth IRA accounts becoming more attractive amidst the proposed tax alterations, affecting how you structure your retirement savings.

  • On a broader legislative level, the American Rescue Plan Act, inked by President Biden, has dispatched an $83 billion lifeline to counteract deep cuts in pension benefits, offering short-term relief to as many as 1.5 million individuals. As you steer through the stock market in election years, staying attuned to these policy shifts, which could reshape investment landscapes, is essential. Moreover, pivotal personnel appointments in the Biden administration are anticipated to play a decisive role in policy execution—remember the adage, "Personnel is policy." These appointments may dictate the tempo and trajectory of regulatory developments affecting your retirement planning. Within Biden's framework of initiatives aimed at retirees lies the 8.7% Social Security cost of living adjustment and plans like the Extra Help program, designed to aid seniors in managing Medicare Part D and copays. Also, should your income surpass $400,000, prepare for a proposed payroll tax that may become a new facet of your retirement planning calculus. Considering these potential changes, incorporating the right strategies into your retirement planning during an election year is more critical than ever. With keen attention to the transforming economic landscape, driven by shifts in policy and a focus on sustainability and protection of assets, you will be better positioned to navigate the years leading to and through retirement with confidence and clarity.


In conclusion, the election outcomes between President Trump and President Biden carry significant weight for your retirement planning, highlighting the juxtaposition of continued market-friendly policies with comprehensive reforms to bolster social safety nets.

Whether the prospect of sustained tax advantages and investment flexibility under a Trump administration or the promise of enhanced Social Security and healthcare benefits in a Biden presidency, each path presents distinct considerations for safeguarding your financial future. The crux of your retirement strategy should hinge on informed, adaptable planning that remains steadfast amid political shifts, ensuring a resilient and flourishing retirement horizon.Understanding these outcomes underscores the importance of strategic foresight and the need to remain vigilant about the broader implications for personal finance and retirement security.

As we edge closer to casting our votes, it is crucial to reassess and align your retirement plans with the changing tides of economic and political currents. By doing so, regardless of the election results, your retirement objectives can remain within reach, secure in the knowledge that your preparation can withstand the ebb and flow of the shifting political landscape.


As you contemplate retirement planning during an election year, one of the most pressing concerns is how tax policies influenced by the outcome of the Trump vs. Biden election could affect your golden years. Here are some frequently asked questions that might be on your mind:

  • Tax Policies: Under President Biden, there might be an increase in taxes for high earners, particularly in capital gains and income tax. This contrasts with President Trump’s 2020 campaign proposals, which indicated no changes to existing retirement plans or personal income tax rates.

  • Retirement Account Withdrawals: With the potential changes under Biden, if your income is above $1 million, you might see an increase in the tax rate on long-term capital gains and qualified dividends. This means you must reassess your withdrawal strategy from retirement accounts to minimize possible tax liabilities.

  • Social Security Benefits: Biden's proposed changes could be advantageous if you're a low-income retiree, promising higher minimum benefits for new beneficiaries. In comparison, President Trump did not propose specific changes to Social Security benefits, but he did imply a focus on preserving the current system.

  • Estate Planning: If you hold or expect to inherit significant assets, eliminating the basis step-up proposed by Biden could lead to a higher tax burden on inherited capital gains. Under Trump, existing estate and inheritance taxes would potentially remain unchanged.

Healthcare Costs in Retirement: Evaluating healthcare costs is crucial. Biden’s proposal to expand affordable healthcare could reduce expenses for you as a retiree, whereas President Trump's intentions to dismantle the Affordable Care Act may have led to higher costs.

To navigate these fluctuating tax landscapes and policy shifts in the stock market in election years, it’s imperative to consult a financial advisor. They can help tailor tax planning strategies to your situation, ensuring your investments, income sources, and estate plans align with the potential administration's policy implications. Additionally, reviewing investment strategies within the context of the election outcomes will be crucial for staying abreast of ways to optimize your financial standing amidst ongoing economic changes

Moreover, it’s essential to consider broader policy initiatives that might intersect with individual retirement security. These include changes to how retirement contributions are treated, with Biden’s platform altering current deductions into credits and Trump’s temporary measures affecting payroll taxes, influencing the Social Security Trust Fund’s long-term viability.

With Biden emphasizing investment in domestic innovation and global economic strategy and Trump's focus on a more nationalistic economic approach, your retirement investment outlook requires attention to both domestic and international market dynamics. Understanding Biden’s proposed ecological commitments and their implications for the energy sector investments can also shape your decisions, as can the differing stances on student debt relief, which may have broader economic ramifications, potentially affecting the stock market.

As you consider these FAQs and proceed with your retirement planning during an election year, remember that adapting to policy changes is part of securing a robust financial future. Keep a pulse on changes as they happen, and always incorporate flexibility in your planning to ensure your retirement objectives can weather the political climate's inevitable changes and challenges.

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