As Election Day draws near, millions of Americans are left trying to determine how each presidential candidate could affect their lives.
“What’s so difficult right now is that we don’t know what Kamala’s positions are, and it’s the same with Trump,” says Dan Casey, founder of Bridgeriver Advisors and Panic Proof Retirement in Bloomfield, Michigan. Both candidates are more likely to speak in general terms about various topics than to provide detailed policy proposals.
While foreign policy, abortion and immigration are top of mind for many voters this election, those nearing retirement age or already retired are also paying close attention to what’s being said about these critical issues:
— Inflation and cost-of-living
— Stock market volatility
— Social Security and Medicare
— Long-term care
— Housing costs
— Taxes
Inflation and Cost-of-Living
Nearly 3 in 4 American retirees are worried inflation will remain high for the next 12 months, according to the 2024 Retirement Confidence Survey from the Employee Benefit Research Institute. Meanwhile, 69% are concerned about the increasing cost of living and how it will affect their ability to save.
The interest rate increases approved by the Federal Reserve in recent years were designed to cool inflation, but some see a Trump Administration as potentially undoing their work. “(Trump) would be very aggressive about bringing interest rates down and overheating the economy and spiking inflation again,” says Chris Orestis, president of Retirement Genius, a national information resource for older Americans and their families.
Both presidential candidates have also proposed policies that could have the unintended consequence of raising inflation. One example is Harris’s proposal to enact a federal ban on price gouging and take other action to prevent price fixing.
“I can’t imagine price (controls) will go anywhere,” Casey says, “but price (controls) are inflationary.”
Some economists warn that attempts to address price gouging could reduce the supply of goods and increase prices.
Trump’s proposal to enact tariffs on imports also has the potential to exacerbate inflation, some warn. “Trump is big on tariffs,” according to Casey. “His position is tariffs will spur business, (but) tariffs tend to be inflationary.”
“These are, in essence, tax increases on taxpayers because prices go up,” Orestis says.
[5 Ways a Kamala Harris Presidency Could Impact Retirees]
Stock Market Volatility
Many retirees have at least a portion of their savings invested in the stock market, and 62% of retired respondents in the EBRI survey say they are concerned the market will become increasingly volatile.
When it comes to market performance, signs point to stocks responding more positively to Trump.
“The only issue with Kamala is that we just don’t know what policies she’s going to enforce,” Casey says. “The stock market doesn’t like uncertainty.”
Grant Cardone, private equity fund manager for Cardone Capital, also sees danger in Harris’s proposal to increase the capital gains tax from 20% to 28%. “If she approves the capital gains tax, she will destroy the stock market,” Cardone says.
“Under the Trump Administration, the stock market performed very well until COVID, and then it cratered,” according to Orestis. He notes that Biden reignited the market and believes this positive trend can continue with a Harris presidency.
[Biden and Retirement: What Has the President Done for Retirees?]
Social Security and Medicare
Social Security and Medicare provide predictable income and health care benefits, and many retirees count on them for financial security. It’s not surprising then that 71% of retirees surveyed by EBRI are concerned that the government may make significant changes to the American retirement system.
Both Harris and Trump have stated their support of Social Security and Medicare. Neither say they support cutting benefits. Trump has gone even further by promising to eliminate the taxes that approximately 40% of retirees pay on their benefits.
“How that’s going to be funded is beyond me,” Casey says.
Another concern about eliminating the tax on Social Security is that it could accelerate the date by which the Social Security trust funds will be depleted, Orestis says.
Trump’s tax cuts could also accelerate the depletion of the Medicare trust fund, according to Sharona Hoffman, a professor of law and bioethics at Case Western Reserve University in Cleveland and author of “Aging with a Plan: How a Little Thought Today Can Vastly Improve Your Tomorrow.”
“However, Trump also increased Medicare Part B premiums to help pay for benefits and expanded Medicare coverage in several important ways,” Hoffman said in an email. “Harris is likely to continue the Biden Administration’s efforts to lower drug prices and extend coverage.”
She adds that Harris could raise taxes on high earners and close tax loopholes. That may serve to prolong the solvency of the Medicare trust fund.
[READ: Here’s How Much Money You Could Lose if Social Security Goes Bankrupt]
Long-Term Care
No retiree wants to think about requiring long-term care, but most will probably need some help as they age. A 2022 research brief published by the Department of Health and Human Services reported that 56% of those who reach age 65 will likely need long-term services and support. That care is expected to cost an average of $120,900.
“A Trump administration is likely to have a different approach to long-term care than a Harris administration,” Hoffman said. “Trump is likely to want to relax regulations and oversight over long-term care facilities as he did in his first term.”
Meanwhile, Harris may likely continue the Biden Administration’s work toward increasing regulatory requirements for nursing home staffing, transparency and long-term care worker protections, Hoffman says. She may also be likely to increase funding for Medicaid, including home and community-based services.
“Trump wants to do significant reductions to Medicaid,” Orestis says.
That could be detrimental to older Americans since state Medicaid programs are the nation’s primary payer of long-term care services. Nearly a third of Medicaid spending in 2020 was on long-term care, according to the Centers for Medicare and Medicaid Services.
Housing Costs
Housing prices continue to reach record highs, according to the July 2024 Case-Schiller National Home Price Index, and 55% of retirees polled for the EBRI Retirement Confidence Survey say they are somewhat or very concerned this trend will continue.
Cardone thinks Harris’s plan to give first-time homebuyers $25,000 in down payment assistance will only worsen the situation by inflating prices.
“The builder is going to raise the price of (a) home by $75,000,” he says. “Houses are unaffordable, and they are never going to be affordable again.”
Trump has no specific housing proposal but has indicated he favors keeping interest rates low to improve affordability. “He did put pressure on the Fed to keep interest rates low,” Cardone says of the former president’s tenure in office.
Taxes
The Tax Cuts and Jobs Act of 2017, passed by the Trump Administration, significantly changed the tax code. It eliminated personal exemptions, nearly doubled the standard deduction and limited some itemized deductions, such as those for state and local taxes.
The law is scheduled to sunset in 2026, and Casey says many of his clients are focused on what will happen to their tax bill. His impression is that Trump would probably extend the bill while Harris would allow some provisions to sunset, specifically those benefiting taxpayers earning more than $400,000.
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Trump Versus Harris: 6 Top Retirement Issues at Stake in the Presidential Election originally appeared on usnews.com
