Economic shifts are on the horizon, affecting taxes, healthcare and housing as the inauguration of President-elect Donald Trump approaches.
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Baby boomers face specific challenges and opportunities to boost their financial security while planning for long-term health needs.
Whether you’re looking to maximize your savings, refinance your house or plan for caregiving responsibilities, the Trump economy begins. Here are four money moves boomers should make before Inauguration Day.
Boost Emergency Savings
The major economic policy changes of the incoming Trump administration are likely to include a combination of regulatory rollbacks, tighter immigration controls, and import tariffs, said Stuart Schiffman, founder and managing partner of Compound Wealth Advisors.
“While we don’t know the magnitude of these policy changes, it would be prudent for boomers who anticipate retiring in the next few years to have ample cash on hand to pay for living expenses,” Schiffman said. “The extra cash cushion may be needed to avoid selling stocks during a market dip. Losses in the early years of retirement can never be recouped if the principal is spent.”
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Prioritize Healthcare Budgeting
Shifts in healthcare policy also call for prioritizing budgeting and savings.
Christopher Stroup, founder and president of Silicon Beach Planning, said boomers should periodically review the government programs available because eligibility and benefits for Medicaid or other support systems may change.
For example, President-elect Donald Trump appointed Dr. Mehmet Oz to lead the Centers for Medicare and Medicaid Services (CMS).
Overseeing federal healthcare programs that serve 160 million Americans, CMS is one of the most powerful government agencies. Oz is a board-certified heart surgeon and a former television talk show host who has come under fire for his skepticism of his stance on COVID-19 vaccines.
While Dr. Oz unsuccessfully ran for the U.S. Senate from Pennsylvania in 2022, he doesn’t have experience running a federal bureaucracy. Nevertheless, Dr. Oz has advocated for government health insurance for those who can’t afford it and suggested implementing a 20% payroll tax to privatize Medicare fully.
“Boomers should consider setting up a dedicated savings fund specially for healthcare and long-term care expenses,” Stroup said. “An effective way to do this is through a Health Savings Account (HSA) if eligible, or a separate investment account that is earmarked for future healthcare needs Having personal savings can ensure they aren’t caught off guard.”
Consider Fixed Annuities
One option for boomers is to save for policy changes that could affect their wallet and retirement savings is to allocate a portion of their assets to fixed indexed annuities, which provide both protection of principal and guaranteed income for life.
“Many retirees value those benefits, and there could be other positives beyond those provided by annuities,” said Tom Buckingham, Chief Growth Officer at Nassau Financial Group.
“By allocating a portion of their assets to annuities that provide a stable source of income, boomers could allocate other assets to equities, real estate or other risk assets that might benefit from an inflationary environment.”
Refinance Your House
Now might be a favorable time to refinance your house, especially for boomers who have a mortgage with a higher interest rate.
“Even though interest rates have been rising in recent years, they’re still relatively low compared to historical norms,” Stroup said. “So, refinancing could help secure a lower rate and reduce monthly payments.”
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This article originally appeared on GOBankingRates.com: The Trump Economy Begins: 4 Money Moves Boomers Should Make Before Inauguration Day
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